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Sizing Up the U.S. Running Market

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Now that all the major, public athletic footwear brands have reported their respective results for the three months ending June 30 (in Nike’s case, Q4 ended May 31), it is a good time to summarize what each is saying about the running category. 

Brooks Running provided some insight on the running segment in its statement last week by reporting that the U.S. running segment overall was down 10 percent year-over-year in the second quarter, citing the NPD Group/Retail Tracking Service as a source. Based on the earnings results and calls of the public brands, it appears a couple of trends are taking shape. Some bigger brands are intent on expanding their consumer reach and sales within the running segment through new fashion-forward silhouettes, while at least one emerging premium running brand is digging in its heels to become further entrenched in the category. Still others may be forced to re-trench a bit, at least in terms of numbers of SKUs, due to declining sales and consumer interest.

Here's a brief overview of what key brands have been saying about the running category in recent months.

Nike: Unlike in previous annual reports, the company did not disclose wholesale equivalent sales for running footwear in FY21 in its July 10K. Last summer, it reported a 15 percent decline in annual wholesale equivalent running shoe sales to $3.83 billion. During its year-end conference call, Nike executives discussed injecting performance technology into lifestyle products, citing its Spark Flyknit with a dual-density midsole as an example. Earlier this, the brand introduced a sustainable variation of its Pegasus called the Pegasus Turbo Next Nature featuring at least 50 percent recycled content by weight.

Asics: Generated a 13.5 percent increase in performance running shoe sales to equivalent of $925.4 million that included sales increases in nearly all global regions. The company raised its annual outlook, partially due to ongoing positive running shoe sales trends.

Saucony: Boosted by a 32 percent sales increase outside the U.S., Saucony’s sales rose 7.2 percent in the period ended June 30 to $135.5 million, but they fell short of internal forecasts due to lower closeout sales of excess inventory. Parent Wolverine Worldwide, excited about new Italian design influences coming to the brand and global growth in road and trail running, sees the brand delivering mid-teens growth for the fiscal year.

Hoka: The brand is projected to achieve 40 percent higher annual sales for the FY ending in March 2023 after reporting a 54.9 percent topline gain to $330 million in Q1 ended June 30 and surpassing $1 billion mark over the trailing 12 months. With a recent global marketing campaign launch of “Fly Human, Fly” for the brand, parent Deckers Brands appears intent on stretching the label into other segments—trail, hike, walking, and lifestyle—while reaching new end users, key demographics and age groups. 

Adidas: New iterations of its Supernova and Solar Glide franchise drove 17 percent sales growth in running during the second quarter, particularly at price points under €100 ($106.40).

Allbirds: The brand has adopted a conservative view of second half demand and taken steps to lower its operating costs, including an 8 percent workforce reduction. Allbirds has new third-party distribution in the U.S. in Nordstrom and Scheel’s. The brand recently launched its third performance running model, the Tree Flyer.

Brooks: After securing five of the top 25 adult performance running shoes in the U.S. market during the first half, according to NPD, the Berkshire Hathaway-owned company launched its new nitrogen-infused technology in the Glycerin 20 in June, helping it achieve 12 percent revenue growth in the U.S. in the second quarter. Company says it owns a 21 percent market share, based on revenues, in the U.S. performance run segment. The brand launched a new global campaign today called “It’s Your Run.” (See separate story).

On: The Swiss athletic gear brand that filed an IPO in Sep. 2021 is forecasting annual revenue growth of 52 percent to approximately $1.16 billion. On is launching a new website in October preceded by a new flagship store in Los Angeles in September and followed by a new Miami flagship in December. North American sales rose nearly 103 percent in the most recent quarter to the equivalent of $297.1 million. Having already taken a $10 a pair price increase on 40 percent of U.S. styles with more hikes coming later this year and in early 2023, company intends to spend more than $5.3 million in air freight during the third quarter to make sure its new Cloud Monster and Cloud Runner styles are delivered on time.

Under Armour: UA suffered a decline in second quarter running shoe sales, but is introducing a new technology in a training shoe this fall that it hopes to expand into other footwear categories, including running.

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Aug 17, 2022

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