8/21/2012
By David Urani

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Nike (NKE) said today that they will soon be selling their most expensive shoe ever, the Lebron X sneaker, for $315. That's quite a bit of money to drop on some basketball shoes, has Nike gone mad? I say no. In fact, I think in the past few years we've all gone mad for shoes and the latest offering from Nike is a reflection of a new shift in style. It's not only the price of Nike's shoes that are going up, but the values of shoe companies across the industry spectrum. For me, this is one market segment that has been among the most impressive in recent times.

Take a look at the charts of the following companies since 2009 and you'll see what I mean:

Foot Locker (FL) – Under $5 to over $34
DSW (DSW) – Under $7 to over $64
Shoe Carnival (SCVL) – Under $5 to over $23
Finish Line (FINL) – Under $2 to over $22
Wolverine World Wide (WWW) – Under $14 to over $45
Steve Madden (SHOO) – Under $7 to over $42

Various shoe types have seemed to catch Footwear Fever, but athletic shoes in particular have driven a lot of success and that's reflected not only by the sports stores like Foot Locker and Finish Line but in management observations from the broad shoe retailers the likes of  Shoe Carnival and DSW as well.

These days, it's not uncommon to see celebrities walking red carpets sporting an expensive suit, along with a clean new pair of sneakers. People have fallen in love with the look and the bright colors. And as Lebron's pricey new kicks show, the basketball niche in particular is red hot. Nowadays when a new pair of Air Jordans is introduced, people start lining up at the store days in advance. Nike notes that its basketball segment sales were up 17%, including a 9% increase in prices for the shoes.

The stocks continue to march higher today, led by a $0.04 per share beat by DSW along with a 7.5% increase in revenue year over year. On Friday, Foot Locker beat by $0.05 on a 7.2% increase in revenue (10.5% excluding currency headwind).

Other stocks of note include Skechers (SKX), as well as Under Armour (UA), a hot company that's seeing nice momentum from athletic shoes.

David Urani
Wall Street Strategies