Investors are evidently persuaded now that the sporting goods sector will recover from the Covid-19 crisis better than others. The share prices of the public companies in the sector went up on average by 34.5 percent between the end of the first quarter and the end of the second quarter of 2020, according to a study of the stock market conducted on a select number of them by Sporting Goods Intelligence Europe.
Comparatively, the general stock indices grew at lower rates across the world, ranging from an increase of 3.5 percent for the Hang Seng – in a quarter where the coronavirus pandemic had already been mastered in China – up to an increase of 20.0 percent for the Standard & Poor’s 500 index. The FTSE index in London showed a gain of only 8.8 percent.
On the other hand, the share prices of the public sporting goods companies as of June 30 were still down on average by 9.3 percent as compared to Jan. 24, when the first news about the corona outbreak came out in China. Over the same period, the general stock indices showed declines of between 5.9 percent for the SP500 and 18.7 percent for the FTSE.
Specialists in firearms and cycling were among the winners in the course of the second quarter on a sequential basis, thanks to strong consumer demand for their products. American Outdoor Brands, which has been rebranded as Smith & Wesson, was the winner with a jump of 159 percent, while Giant Manufacturing rose by 97 percent.
Thanks to its investments in digital customer engagement, Lululemon posted a gain of 64.6 percent, scoring even better than Nike, a “digital-first” company whose share price increased by only 18.5 percent as investors were disappointed by its latest results. Puma performed better with an increase of 26.5 percent. In the same league, Adidas improved by 13.5 percent and Under Armour by 9.7 percent. Wolverine Worldwide regained the investors’ conference, rising by 56.6 percent.
We were surprised by the resilience of some major retail companies including Mike Ashley’s Frasers Group, formerly called Sports Direct International, whose stock price went up by 67.4 percent in the course of the latest quarter. Its arch-rival, JD Sports Fashion, rose by only 35.9 percent during the quarter, but its stock price was down by 26.7 percent from Jan. 24 versus a drop of 34.1 percent for Frasers. In line with the sector, Foot Locker was up by 32.2 percent for the quarter, but Dick’s Sporting Goods performed much better, gaining 94.1 percent.
A former star, the fashion-oriented Moncler, grew by a modest rate of 2.3 percent in the quarter. The main Chinese brands had a relatively lackluster performance, ranging from a 21.3 percent decline for 361 Degrees to a growth of 20.1 percent for Anta Sports Products, but both of them recorded declines as compared to Jan. 24. Topsports, the big Chinese sporting goods retailer, rose by 21.9 percent during the post-Covid quarter but was down by 6.1 percent from Jan. 24. Among the Chinese manufacturers, Feng Tay improved by 28.1 percent during the quarter, but Yue Yuen lost 0.8 percent of its value in the last three months and 49.4 percent since the Chinese Lunar Year.
Foto: Chris Liverani, Unsplash