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Athletic Footwear Delivered Unexpected Growth in 2018, But Future Remains Uncertain

A big fourth quarter has revived expectations for sales of athletic footwear in the United States.

Athletic footwear, as a segment, grew by mid-single digits in 2018, according to NPD vice president and senior industry advisor Matt Powell, and much of that growth was obtained in the 53rd week of the 2018 retail calendar. That single week provided roughly one-third of the entire segment’s growth. And as bad weather set in, consumers purchased high numbers of cold/all-weather boots, lifting the year’s numbers overall.

According to NPD, the year’s best-selling athletic styles, in order of sale dollar value, were the Nike Tanjun, Nike Air Max 270, Converse Chuck Taylor Ox Low, Jordan XI, Nike Air Huarache, Vans Ward, Nike Revolution 4, Nike Flex Contact, Adidas Yeezy Boost 350 v2, and Nike Air Force 1 Low.

Performance footwear categories, however, saw negative growth for the third year in a row.

“Not a real performance shoe on the list,” Powell tweeted out regarding the report. “Not one performance basketball shoe on the list. Many mid-market shoes. Seismic changes in the industry.”

That’s because, as Powell puts it, “the athleisure trend has fully taken over athletic footwear.”

All performance footwear categories were negative for the year, including running, training and sport-specific styles like basketball sneakers. The only outlier was soccer boots, which experienced a temporary boost as it was a World Cup year, though those gains will likely dwindle within the year, according to Powell.

Still, brands that integrate performance features into their athletic-inspired styles have room to grow.

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“While performance struggles the opportunity lies in athletic inspired sneakers with a performance-based heritage, as they are reaping the benefits of this shift,” Powell wrote. “Sport lifestyle footwear, designed for style and everyday wear and not for engaging in sport activity, continues to drive the broader footwear market and now represents nearly half of all athletic shoes sold in the U.S.”

Skate shoes and sport slides have both experienced high growth thanks to this phenomena. Skate shoes grew by 40 percent in 2018 with 20 percent growth for sport slides.

Vans were one of the most successful brands at cracking that code last year. The company saw a nearly 60 percent leap in sales growth in 2018 and has taken a large portion of the footwear mindshare when it comes to young people.

Brooks, New Balance and Reeboks also grew in 2018, and Skechers saw record-breaking growth during the year and its most recent earnings report gave the company a large boost in stock value. Those that fared less favorably in 2018 were Under Armour, Asics, Saucony and Mizuno, with each posting declines in sales.

The battle between Adidas and Nike is still heating up, with Adidas’ sales growing in the high-teens and Nike trailing slightly behind with a mid-single-digit increase. Nike’s return to growth is notable, however, Adidas took over 100 basis points in market share during the year—leading to Powell declaring the brand had the highest share he has ever personally recorded. This explosive growth was undoubtedly assisted by the “democratization” of Adidas’ Yeezy line, Powell said, which grew its sales by more than 500 percent thanks to increased production and better availability.

“Whether Yeezy can withstand the pressure of the expanded allocation remains to be seen,” Powell said.

As far as where consumers are buying these shoes, the report noted a few winners. Premium department stores performed the best in 2018, leading to high sales gains. Shoe chains were also on the move with high single-digit growth and mid-tier department stores netted a small bump worth a mid-single digits lift.

Despite all the positive news for athletic footwear brands—at least among those that don’t rely on performance styles—success in 2018 was defined by one-offs that didn’t leave brands with much of a pathway to future success. Brands will need to continue to look for new avenues of success this year, Powell noted.

Last week, he also tweeted a warning to prospective sneaker buyers for the year ahead.

“Your sneakers are going to get more expensive,” Powell said. “Trump says he won’t meet with China’s Xi Jinping before the deadline for the 90-day trade war ceasefire.”