These Are 5 Retail Stocks to Buy in 2025, According to Market Watchers
Persisting inflation put a damper on consumer spending throughout 2024, but some brands and retailers ended the year in a stronger position than before. In general, the shoe companies that offered a strong value proposition, quality products and a true omnichannel experience were the big winners by the end of the year.
As we enter 2025, here are the retail stocks that stand out above the rest and will likely continue to perform well in the coming year, according to analysts and market watchers:
ONON — On Holding
On, the iconic sportswear company and this year’s Brand of the Year at FNAA 2024, has managed to consistently post positive results in North America and other geographies. Throughout 2024, the performance running brand made headway in other key categories like tennis and also gained favor among non-athletes as well who have opted to buy the brand for its “cool” factor. Notably, On signed Zendaya to a multi-year deal in June. Under the deal, the Emmy and Golden Globe winning actor will contribute to select collections, products and creative campaigns with On that center on movement an storytelling.
BTIG analyst Janine Sticher named On as a key stock pick for 2025, citing the brand’s strong pricing power as well as its limited exposure to sourcing in China sourcing, which makes it less vulnerable to tariffs placed on imports from the region.
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“We note tailwinds forming into 2025 as the company continues to benefit from DTC mix shift, begins to lap EMEA door closures, and starts to see distribution benefits from the Atlanta warehouse automation,” Sticher wrote in her mid-December note.
She added that “marketing investments should continue to yield benefits in brand awareness.”
BIRK — Birkenstock
Earlier this month, Birkenstock reported outstanding top and bottom line results for fiscal year 2024 that beat its expectations. Revenues for the year increased of 21 percent to 1.8 billion euros, which included double-digit revenue growth across all geographies. Sales were strong in both DTC and wholesale. During the year, Birkenstock opened 20 new stores, bringing its total store count to 67.
Jefferies analysts, led by Randal Konik, made a strong case for Birkenstock going into 2025 in an mid-December note to investors. The team cited the brand’s strong focus on product diversification and distribution.
“Birkenstock’s focus on diversifying its product portfolio, particularly in closed-toe, offers top-line growth potential, while its multi-channel distribution model offers margin expansion,” read the note. “Recent capital investments are expected to drive sustainable longterm performance. With a robust presence in Europe and strong growth in the US and other regions, Birkenstock is well-positioned for continued global expansion.”
BOOT — Boot Barn
Boot Barn, which is progressing on a goal to open 900 stores across the U.S. by 2030, announced the retirement of its longtime chief executive officer Jim Conroy in October. Despite the sudden change at the top, as well as the chain’s exposure to sourcing in regions that could be subject to tariffs, analysts were overall positive about Boot Barn’s long-term potential.
“While their sourcing exposure is middle of the pack, and we don’t see significant price increases as likely, we believe their key lever in their ability to weather tariffs is their scale and growth plans, as well as their meaningful private label exposure, which gives them clout with brand partners, while tariffs likely disrupt the independents they compete with,” BTIG analyst Janine Sticher wrote in a mid-December note.
WMT — Walmart
Jefferies analyst Corey Tarlowe named Walmart as a top stock pick going into 2025. In a Dec. 17 note, Tarlowe said the retailer would likely “benefit from improving discretionary spending, and leverage tech, AI, and alt revenue streams to improve margins ahead.”
Tarlowe also pointed out that Walmart has recently gained share among higher income consumers, a trend that is likely to persist and benefit Walmart in 2025. According to a Jefferies survey, 62 percent of households with a yearly income of more than $100,000 planned to shop Walmart’s website during the holidays this year.
“Overall, we expect Walmart to command an increasingly large share of customer spending through bolstered omnichannel capabilities, partnerships, and services,” Tarlowe wrote. “This justifies above-historical-average growth.”
SKX — Skechers
In an interview with FN, Williams Trading analyst Sam Poser named Skechers as one of his top stock picks going into 2025. He cited international expansion opportunities in India and China as well as the brand’s general value proposition.
Poser also noted how Skechers doesn’t really directly compete with any of the popular athletic shoe brands like Nike when it comes to product type and shelf space. Instead, Skechers has found a strong consumer base with its popular slip-in designs within the family channel.
“In the primary distribution of Sketchers, which is family footwear, people come in going, ‘I want a slip in shoe.’ There’s really not a key item that Nike or any other athletic brands have in that channel that people come in looking for,” Poser said. “And I think that becomes a big advantage for Skechers, especially outside of athletic, because they also have work product, men’s and women’s casual and widths in a lot of shoes.”
