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Skechers Overtakes Adidas; Becomes No 2 in U.S. Footwear

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According to media reports, Skechers USA Inc. (SKX - Free Report) overtook Adidas AG (ADDYY - Free Report) to occupy the number #2 spot in the U.S. sports footwear market. The company has been gaining ground steadily by offering stylish and casual shoes at a much compelling price than the conventional athletic brands.

As per the retail tracker NPD Group, Skechers held 5% of the sports footwear market in the U.S. for the quarter ended Mar 2015, exceeding Adidas’ 4.6% share which now holds the third place. Nike, Inc. (NKE - Free Report) and its Jordan Brand still remains the undisputed champion of the sports footwear market holding the largest share of 62%.

Skechers has benefited from the so-called athleisure trend that has been sweeping the retail sector in the U.S. This rise in the company’s market share is attributable to the growing preference for cheaper shoes in the country. People now want to avail cheaper sports shoes, which they can put on to make a fashion statement irrespective of whether they work out or not.

With increased focus on the new line of products, cost containment, inventory management, a global distribution platform and sturdy backlogs, the company is confident of sustaining its growth momentum. Moreover, Skechers’ international business remains a significant sales growth driver for the company.

We note that Skechers' net sales surged 29% to a record $2.4 billion in 2014. So far in the year, shares of this Zacks Rank #3 (Hold) stock have soared almost 90%.

With obesity becoming a major concern, people turning toward practicing yoga and working out, demand for sportswear is bound to increase. As a result we expect Skechers to hold its place in the near future.

A better-ranked stock in the retail sector is Carter's, Inc. (CRI - Free Report) , sporting a Zacks Rank #2 (Buy).

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