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Let's Talk Shoes
I'm really intrigued by the shoe industry, odd I know, but it's been one of the more impressive niches of the economy over the past couple of years. I've highlighted before how shoe stocks like Foot Locker (FL) (in our hotline portfolio), Shoe Carnival (SCVL), DSW (DSW), and Wolverine Worldwide (WWW) have been on a three year tear. It seems to be a cultural fashion shift that focuses on footwear, and in particular towards athletic shoes more than any other.
Now I know Nike's (NKE) results last night weren't much of a vote of confidence, but let's look at what made them disappoint. Input costs went up and overseas demand softened (China especially). But if you look at North America the growth story remained intact, with sales up 23%.
That takes me to a less spotlighted company, Finish Line (FINL) which reported this morning. They beat by $0.05 on EPS and revenue of $385 million was above the $357 million consensus and up 16% year over year. They also raised FY13 guidance from $1.53 to $1.59-1.66. So for a shoe retailer that doesn't have direct exposure to those higher input costs and a big footprint overseas business is still kickin'. It looks like further confirmation that the sneaker growth story remains well intact domestically.
It's also why those flashy new $270 Lebron X kicks are likely to fly off the shelves much like a sparkly new iPhone 5.
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