Companies in the Zacks Shoes and Retail Apparel industry continue to grapple with persistent pressures. Higher input and freight costs, lingering supply-chain inefficiencies, and elevated SG&A tied to digital and store investments are weighing on margins. These structural hurdles, combined with currency volatility, geopolitical uncertainty and evolving trade and tariff policies, add complexity. A softer consumer backdrop and tight labor market also contribute to margin strain.

However, industry players are intensifying their brand-building and promotional efforts to maintain consumer relevance. Demand for activewear, footwear and wellness-focused products remains solid, supported by the broader shift toward healthier lifestyles. Leaders are leveraging this trend through product innovation, expanded athleisure assortments, and stronger e-commerce and omnichannel capabilities.

Looking ahead, sustainable growth will depend on continued innovation, enhanced digital infrastructure and deeper consumer engagement. Well-established brands like NIKE Inc. (NKE Quick QuoteNKE - Free Report) , Adidas AG (ADDYY Quick QuoteADDYY - Free Report) , Steven Madden, Ltd. (SHOO Quick QuoteSHOO - Free Report) , Wolverine World Wide, Inc. (WWW Quick QuoteWWW - Free Report) and Caleres, Inc. (CAL Quick QuoteCAL - Free Report) remain well-positioned to navigate near-term challenges and capture long-term opportunity.

About the Industry

The Zacks Shoes and Retail Apparel industry comprises companies that design, source and market clothing, footwear and accessories for men, women and children under various brand names. Product offerings of the companies mostly include athletic and casual footwear, fashion apparel and activewear, sports equipment, bags, balls, and other sports and fashion accessories. The companies showcase their products through their branded outlets and websites. Some companies distribute products via other retail stores, such as national chains, online retailers, sporting goods stores, department stores, mass merchandisers, independent retailers and catalogs.

A Look at What's Shaping the Shoes & Retail Apparel Industry's Future

Cost Headwinds: Industry players continue to wrestle with elevated costs, pressured by both internal reinvestments and external macro forces. Margin pressures stem from persistent commodity price inflation, supply-chain bottlenecks and higher logistics expenses, with transportation costs expected to remain a near-term drag. At the same time, stepped-up spending on marketing, digital platforms and store upgrades is hiking SG&A expenses. To sustain brand visibility and consumer engagement, companies are channeling more into promotional campaigns and tech-driven initiatives. Layered onto these structural cost challenges is a backdrop of economic uncertainty, from geopolitical tensions and trade tariffs to currency volatility and shifting tax policies. Weakening consumer sentiment and tight labor markets complicate the operating environment, intensifying pressure on profitability across the sector.

Consumer Demand Trends: Athletic and athleisure brands continue to ride the wave of strong consumer demand, a trend projected to hold steady. From footwear and yoga wear to jackets and running gear, the category benefits from a growing appetite for both performance and style. The rising influence of fashion in everyday wear is further fueling the demand for innovative apparel and footwear across the United States. To capture this momentum, industry players are leaning on product innovation, targeted marketing, store expansion and e-commerce growth. The health and wellness movement is also shaping buying patterns, with footwear brands expanding into versatile, multi-functional designs that balance performance, comfort and style, making them especially popular among consumers.

E-Commerce Investments: Digital channels remain a major growth engine for the athleisure market. Brands are expanding their reach through websites, social media and digital platforms, catering to consumers who increasingly shop from home. With athletic-inspired apparel gaining traction online, companies that scale their product offerings and strengthen e-commerce capabilities are best positioned for long-term growth. Investments in faster delivery, supply-chain efficiency and fulfillment enhancements are further sharpening competitive edges. At the same time, physical stores are being reimagined through renovations, improved checkout experiences and mobile point-of-sale options, creating a seamless omnichannel journey. These initiatives, across both online and offline touchpoints, are expected to drive more substantial traffic and sustained sales growth.

Zacks Industry Rank Indicates Dull Prospects

The Zacks Shoes and Retail Apparel Industry is an 8-stock group within the broader Zacks Consumer Discretionary sector. The industry currently carries a Zacks Industry Rank #180, which places it in the bottom 25% of more than 250 Zacks industries.

The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates dull prospects for the near term. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

The industry’s positioning in the bottom 50% of the Zacks-ranked industries is the result of a negative earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually losing confidence in this group’s earnings growth potential.

Before we present a few stocks that you may want to consider for your portfolio, let us look at the industry’s recent stock market performance and valuation picture.

Industry vs. Sector

The Zacks Shoes and Retail Apparel industry has underperformed the sector and the S&P 500 in the past year.

Stocks in the industry have collectively declined 18.9% in the past year. Meanwhile, the Zacks Consumer Discretionary sector has fallen 4.2% and the Zacks S&P 500 composite has risen 15.2%.

1-Year Price Performance

Shoes & Retail Apparel Industry's Valuation

On the basis of forward 12-month price-to-earnings (P/E), commonly used for valuing Consumer Discretionary stocks, the industry is currently trading at 26.34X compared with the S&P 500’s 23.44X and the sector’s 18.19X.

Over the last five years, the industry traded as high as 38.15X and as low as 20.83X, with a median of 27.10X, as the chart below shows.

Price-to-Earnings Ratio (Past 5 Years)

5 Shoes & Retail Apparel Stocks to Watch

Steven Madden: This Long Island City, New York-based company designs, sources, markets and sells fashion-forward branded and private-label footwear, accessories, handbags and apparel for women, men and children across the world. Steven Madden is well-positioned to deliver durable upside, driven by a strategic shift toward higher-margin direct-to-consumer channels, where accelerating online and owned-store growth enhances pricing power and customer economics. The company’s acquisition of a complementary international DTC platform meaningfully expands scale, improves geographic mix and unlocks revenue and margin synergies through distribution and marketing integration.

Steve Madden continues to deepen consumer engagement and cultural relevance, particularly among Gen Z and millennials, key demographics for growth. SHOO has a trailing four-quarter earnings surprise of 3.3%, on average. The Zacks Consensus Estimate for the company’s 2025 sales indicates growth of 10.9% from the year-ago quarter’s reported figure. The consensus estimate for SHOO’s 2025 EPS has increased 4.4% in the past 30 days. Shares of this Zacks Rank #2 (Buy) company have declined 0.1% in the past year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Price & Consensus: SHOO

NIKE: The global leader in athletic footwear, apparel and sports accessories is set to benefit from its Consumer Direct Acceleration strategy. NKE is actively repositioning the brand to enhance competitiveness and drive sustainable, long-term growth. The company is sharpening its focus on sports, accelerating product innovation and strengthening its brand storytelling with bold, high-impact messaging. It is advancing its innovation pipeline and refining its marketplace strategy to better align with consumer preferences.

NIKE is shifting its digital platform to a full-price model, reducing reliance on promotions and scaling back performance marketing investments. The Zacks Consensus Estimate for NKE’s fiscal 2026 sales indicates growth of 0.9% from the year-ago quarter’s reported figure. The consensus estimate for NKE’s fiscal 2026 earnings has moved up by a penny in the past seven days. NIKE delivered an earnings surprise of 53.7%, on average, in the trailing four quarters. This Zacks Rank #3 (Hold) stock has declined 15.6% in the past year.

Price & Consensus: NKE

Adidas: This leading manufacturer and seller of athletic and sports lifestyle products in Europe, the Middle East, Africa, North America, Greater China, the Asia Pacific and Latin America is poised to gain from strong demand, compelling products and the robust performance of its online business. ADDYY has been benefiting from improved sell-through of all Adidas products in the market. The company has been witnessing improved margins, driven by the recently implemented price increases and an improved channel mix.

The Zacks Consensus Estimate for ADDYY’s 2025 sales and earnings indicates growth of 13.5% and 88.3%, respectively, from the year-ago quarter’s reported figures. The consensus estimate for ADDYY’s 2025 EPS has been unchanged in the past 30 days. Adidas delivered a negative earnings surprise of 50.5%, on average, in the trailing four quarters. This Zacks Rank #3 stock has dipped 25.8% in the past year.

Price & Consensus: ADDYY

Wolverine: The company is engaged in designing, manufacturing and distributing a wide variety of casual and active apparel and footwear. It also manufactures children’s footwear and specially designed boots and accessories for industrial purposes. Wolverine’s focus on brand structure, increasing efficiency by removing costs, strategic review of its portfolio, improving working capital and lowering leverage bode well. The company continues to focus on strengthening its DTC business. Speed-to-market initiatives, deployment of digital product development tools, expansion of e-commerce platforms and frequent product introductions are steadily contributing to Wolverine’s performance.

The Zacks Consensus Estimate for WWW’s 2025 sales and earnings suggests growth of 6.5% and 47.3%, respectively, from the year-ago quarter’s reported figures. The consensus estimate for WWW’s 2025 EPS has been unchanged in the past 30 days. The company has a trailing four-quarter earnings surprise of 31.8%, on average. Shares of this Zacks Rank #3 company have declined 21.8% in the past year.

Price & Consensus: WWW

Caleres: This Saint Louis, Missouri-based company designs, develops, sources, manufactures and distributes footwear in the United States, Canada, East Asia and internationally. Caleres offers a steadily improving investment case, supported by strong momentum in its Brand Portfolio, where Lead Brands continue to gain share and deliver healthy growth. The recent addition of Stuart Weitzman expands its premium positioning, with integration efforts expected to unlock meaningful cost synergies over time. The company is also seeing improving trends at Famous Footwear and strong eCommerce traction, signaling stabilizing consumer demand.

Caleres is prioritizing cost discipline, inventory management and structural efficiencies. These actions position the company for more durable margins and a stronger long-term financial profile. CAL has a trailing four-quarter negative earnings surprise of 15.1%, on average. The Zacks Consensus Estimate for the company’s fiscal 2025 sales indicates growth of 1.1% from the year-ago quarter’s reported figure. The consensus estimate for CAL’s fiscal 2025 EPS has been unchanged in the past 30 days. Shares of this Zacks Rank #3 company have declined 45.8% in the past year.

Price & Consensus: CAL