After a rocky 2023, some major shoe brands say they are finally turning the corner.
In the last few weeks, executives from Wolverine Worldwide, Under Armour and VF Corporation said they are progressing on their respective plans — which were laid out in 2023 — meant to turn around sagging parts of their businesses.
Here’s a look at where these three major shoe companies stand on their progress plans— and what analysts say to expect in the short and long term.
Watch on FN
VF Corporation: An uncertain timeline
VF Corp., the parent company to Vans, The North Face, Supreme and more brands, in October laid out a strategic business transformation plan, part of which involves revitalizing the Vans brand with a new president and reviving business in the U.S.
In a call with analysts earlier this month, VF chief executive officer Bracken Darrell said that he is “energized by the progress of Vans,” though declined to provide a specific timeline for when the struggling brand would return to growth.
In a Feb. 14 note giving the company a “neutral rating,” BTIG analyst Janine Stichter said that while the company seems determined to improve, the timing on broader progress is “still a question mark.”
“We agree that much of the underperformance stems from product (an area where Mr. Darrell has historically excelled in reinvigorating) and org structure, and see a path for Vans and The North Face to return to growth,” Stichter said. “However, what remains less certain, by management’s own admission, is the timeline to improvement, especially as long lead times limit the ability to make a significant near-term impact.”
Under Armour: Progress in sight
Under Armour CEO Stephanie Linnartz said in a call with investors on Feb. 8 that the company’s strategy to revamp business — which includes growing sales in North America — was progressing. Within footwear, Under Armour is investing in a new design identity that hones in on more casual, lifestyle looks and is looking to partner with more high-end distribution partners to drive demand to this category.
According to Williams Trading analyst Sam Poser, Under Armour’s efforts are beginning to come to fruition in subtle ways.
“We are slowly beginning to see small improvements, and expect to continue to see improvements in Under Armour’s product offerings, and better defined allocation and segmentation strategies,” he wrote in a Feb. 8 note. “Those improvements, in our view, will lead to a stronger Under Armour brand, and position the company for a positive and profitable growth inflection in North America.”
UBS analyst Jay Sole also had a positive outlook on Under Armour’s transformation potential in a note following the company’s Q3 earnings release in February.
“We think the company has taken a number of actions aimed toward revamping product innovation and brand loyalty,” Sole wrote. “We believe Under Armour will start to realize benefits from these strategic moves over the next 12 months.”
Wolverine Worldwide: Murky visibility
Wolverine Worldwide, which owns the Merrell, Saucony and Sweaty Betty brands, said this week that it finished 2023 with revenue and earnings that were in line with its guidance. Inventory and debt levels were also better than expected, after months of aggressive divestitures and cost cutting measures.
CEO and president Chris Hufnagel said in a statement that the company is “effectively executing” its transformation plan with “great pace” and has largely completed the stabilization phase of the turnaround stage. Hufnagel said he expects the company to drive “an inflection of growth in the back half of 2024” which will set the brands up “to accelerate into 2025.”
Stifel analyst Jim Duffy said in a Wednesday note that this timeline for growth is “plausible given easing compares, cleaner inventories and a cleaner marketplace, but visibility remains challenging.”
“Wolverine remains a show-me story,” Duffy wrote. “We expect upside to shares [to be] limited until visibility to inflection improves.”
According to UBS analyst Mauricio Serna, Wolverine will likely be able to turn see strong results with its turnaround plan, “but the evolution of its model will take time.”
“Wolverine has a high exposure to the slow-growing wholesale channel,” he said in a Thursday note. “The good news is many of its channels are capable of enduring retail disruption.”
