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On Wednesday, Piper Sandler released insights from its 49th semi-annual Taking Stock with Teens Survey, which tracks trends in teen preferences for footwear, softlines, and global brands. The survey revealed a continued fragmentation in the footwear and apparel markets, with smaller brands like On Running, Birkenstock (NYSE:BIRK), New Balance, and Asics climbing in popularity among teens. In particular, UGG emerged as the top fashion trend, outpacing the previously dominant Leggings/lululemon among upper-income females.
Nike (NYSE:NKE), though maintaining its number one position, experienced a notable decline in mindshare, especially with upper-income females. The survey indicated that Nike's mindshare among all teens stood at 49%, but saw a year-over-year decrease, with a significant 13-point drop among females. The dip was most pronounced with upper-income females, where Nike's mindshare fell by 16 points.
Adidas (OTC:ADDYY) retained its second-place standing as a favorite footwear brand, suggesting stability in its core offerings, while New Balance ascended to the second spot for male teens, driven by its popularity in the upper-income bracket. Conversely, brands such as Converse, Vans, and Crocs (NASDAQ:CROX) saw a reduction in mindshare, although Crocs gained traction among upper-income males.
In terms of athletic apparel, Alo Yoga and Fabletics are gaining ground, with Alo Yoga's mindshare more than tripling to 6% and Fabletics making its first appearance in the survey since Spring 2023. Hoodies emerged as the top trend for males, while UGG's rise to the top spot for upper-income females marked a significant shift in fashion preferences.
On Running also saw increased popularity, moving up to the seventh top footwear brand among all teens. The brand witnessed the most significant growth in mindshare with upper-income females, matching HOKA's share in this demographic. This suggests that On Running is gaining momentum and that consumers are willing to pay a premium for innovative products.
The survey's findings provide valuable insights into the evolving preferences of teen consumers and could have implications for the market positioning of brands like Nike and LULU. Nike's expected innovations and rationalization in the coming fall could be pivotal in addressing the shifts in consumer loyalty observed in the survey.
In other recent news, Steven Madden (NASDAQ:SHOO) reported its fourth-quarter 2024 earnings, surpassing analyst expectations with an earnings per share (EPS) of $0.55 and revenue of $582.3 million, both exceeding forecasts. The company anticipates a 17-19% revenue increase for 2025, bolstered by the strategic acquisition of Kurt Geiger, which aims to enhance its "accessible luxury" offerings. The acquisition is projected to add $0.10 to EPS, although Steven Madden's overall EPS forecast for 2025 falls short of consensus estimates due to potential trade tariffs. Analysts from Telsey Advisory Group and Jefferies revised their price targets for Steven Madden, with Telsey lowering it to $38 and Jefferies to $36, both maintaining a neutral stance on the stock. Despite positive sales growth projections, Steven Madden's gross margin is expected to face pressure, partially due to increased promotions and reliance on private label products. The company has shown robust financial health, with a full-year revenue increase of 15.2% to $2.3 billion in 2024, driven by growth in wholesale and direct-to-consumer segments. However, concerns remain over profitability amid a challenging macroeconomic environment, as highlighted by both Telsey and Jefferies.
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