According to a May survey from UBS, shoppers across Europe love their On, Crocs and Birkenstock shoes.
Proprietary data from UBS — gathered from credit card, debit card and account bank transactions — that tracks consumer spending shows which brands saw improved sales on a year-over-year basis, which ones saw declines and which were out of favor.
For the month of May, the most recent period where data was available, the tally on European consumer spending found that the footwear brand winners were On, up 12 percent for the month on a year-over-year basis, Crocs up 8 percent and Birkenstock up 1 percent. Across the same data points, Hoka, Vans and Ugg were down on a year-over-year basis.
UBS’ European data points were also available on total spend over a two-year basis. Again, On, Crocs and Birkenstocks were clear winners, and Hoka also ranked high with consumers.
UBS doesn’t comparable reports for U.S. consumer spend, but noted in a research report that spending intentions remain solid. While shoppers’ view of the economy has been impacted by inflation resulting from the Middle East conflict, other data points suggest that they remain resilient.
That conclusion coincides with the latest Conference Board’s report on its Consumer Confidence Index for June. The overall Index moved up 0.6 points to 91.2, up from a downwardly revised 90.6 in May. Of its two components, the Present Situation Index measuring current business and labor market conditions fell by 3.0 points to 116.4. The Expectations Index on the short-term outlook about six months out rose by 3.0 points to 74.4. June’s survey period for preliminary results was June 1-23, which includes the extension of the U.S.-Iran ceasefire agreement.
“Consumer confidence inched up in June as falling oil prices in recent weeks provided some relief to consumer inflation fears,” The Conference Board’s chief economist Dana M. Peterson said. She added that while consumers were more positive about business conditions versus last month, they also believed that the labor market has softened.
In the U.S., the shoe firms that UBS has a “Buy” rating on their respective shares are On Running, Birkenstock, Ugg and Hoka parent Deckers Outdoor Corp., and Wolverine World Wide.
On appears to be the big winner in the U.S. too. UBS analyst Jay Sole said “On’s continued focus on innovation, performance, athletes, sports, and direct-to-consumer selling, while maintaining a premium brand position, will lead to industry-leading sales growth and earnings beats.”
Sole also expects On to continue to perform well in the U.S. run specialty channel. The brand’s management said the company would be actively prioritizing clean inventory levels and full-price sell-through within its wholesale partners ahead of a planned and significant innovation cycle that Sole said will likely start this October.
“On’s approach is intended to ensure new products launch into a clean marketplace, reinforcing brand desirability,” Sole noted. And he said that early feedback on new innovation has been strong, with product refreshes anchored by new technologies, including as its Surreal superfoam, which will launch with Cloudsurfer 3. Sole also noted “exceptional demand” for Cloudrunner Max.
“With strong order books, positive early feedback on new technologies, and a likelihood of acceleration later in the year, we think current dynamics should be viewed as supporting the company’s long-term growth strategy,” Sole concluded.
