The top sporting goods industry performers by sales and profits in Q3 2023

• The latest sporting goods industry sales and profits at a glance
• What affected the sporting goods industry this quarter?
• How did Sports Apparel firms perform in Q3 2023?  
• How did Footwear companies perform in Q3 2023?  
• Sales and profits in the Sporting Goods Equipment sector in Q3 2023  
• What happened in the sporting goods Diversified/Retail sector?  
• The biggest news stories in the sporting goods industry this quarter
• The SGI Europe Sporting Goods Industry Scorecard Q3 2023  
• About these numbers

Sales and profits at a glance

Aggregate revenues for 47 public sporting goods companies declined by more than 7.7 percent to €51,936.6 million. This is down from €56,284.8 million from our Q2 scorecard. Aggregate net income slipped by 20.5 percent to €3,123.4 million (down from €3,926.9 million in Q2), with every sector except Footwear down. 

The 10 sporting goods companies with more than €1 billion in quarterly revenue realized a 6.3 percent drop in total sales, as their combined net income declined by more than 17 percent. However, if we were to exclude VF Corp., their aggregate profit fell by 7.6 percent year-over-year. 

Return on sales (RoS) for the 10 dipped by 90 basis points year-over-year to 6.3 percent versus 7.2 percent in our Q3/22 scorecard. Again, excluding VF Corp.’s sales and losses, the RoS was down by only 10 basis points to 8.0 percent from 8.1 percent last year. 

It should be noted that all results for the period that were not reported in euros were converted at the average Q3 rate as calculated by fxtop.com. The US dollar was down 7 percent against the euro in our Q3 period. 

What affected the sporting goods industry this quarter?

Peloton’s latest financial reports in November of a year-over-year net loss of $159.3 million was a nearly 64 percent improvement from the figures recorded in our Q3/22 scorecard in December last year. However, the brand’s losses continue to distort the bottom-line results within the Equipment sector and sporting goods industry as a whole. 

VF Corp.’s €615.7 million tax expense related to an unfavorable tax ruling related to its 2011 acquisition of Timberland brought down profits for its most recent reporting period ending closest to Sept. 30. Aggregate RoS was down by 90 basis points year-over-year to 6.1 percent, versus 7.0 percent in our Q3/22 scorecard. 

How did Sports Apparel firms perform in Q3 2023? 

With all but Revolution Race reporting lower year-over-year sales for the period, Sports Apparel RoS came in at -3.0 percent versus +2.5 percent in Q3/22. 

But again, excluding VF Corp., RoS was +8.1 percent. This is despite six of seven Sports Apparel entrants posting lower year-over-year sales.  

Only Revolution Race and Under Armour posted improved profitability year-over-year. 

Footwear companies maintained RoS level despite lower sales, profits

The 17-company Footwear segment, where Nike generated 35 percent of aggregate revenues, and Adidas was responsible for 17.9 percent, produced an RoS of 7.8 percent, even with lower revenues at the majority of footwear companies compared with this period last year. Aggregate sales fell by nearly 6 percent to €33.6 billion.

On Holdings had the largest percentage gain at 48.2 percent; Wolverine Worldwide reported the widest percentage sales decline at 29 percent. 

On the profit side, only Allbirds reported a quarterly loss, although eight entrants showed lower year-over-year profitability. Brazil’s Grupo SBF had the largest profit gain on a percentage basis, followed by On. 

Sales and profits in the Sporting Goods Equipment sector in Q3 2023 

Sporting Goods Equipment was the worst-performing sporting goods segment during our Q3/23 scorecard period, with aggregate sales down more than 16.6 percent and corresponding profitability off by 41.1 percent. Three companies (Clarus, Compass Diversified, and GoPro) had triple-digit percentage declines in profitability. 

In total, 14 sporting goods companies in the equipment sector had lower year-over-year sales. 16 of 17 reported lower year-over-year revenues (Fenix Outdoor sales were flat). Aggregate RoS was 3.5 percent versus 4.9 percent in our Q3/22 scorecard.

What happened in the sporting goods Diversified/Retail sector? 

Despite solid contributions from Lululemon and Garmin, profitability slipped by 23.8 percent in the six-company diversified/retail segment. 

Newell Brands, XXL Asa, and Zumiez each reported a loss during the period. Aggregate sales were down by 4.6 percent, with only Lululemon and Garmin producing higher year-over-year revenues. RoS was 7.9 percent, down from 9.8 percent in Q3/22. 

The biggest news stories in the sporting goods industry this period

• HanesBrands has named Richard Mcleod, formerly of Canada Goose, as Chief Marketing Officer for the global Champion business. 

• Canada Goose, which recently acquired its first European factory, lowered its FY24 outlook in early November due to slowing business in September and the challenging macroeconomic environment worldwide. 

• Under Armour, which has opened two stores in Italy through its partnership with Oberalp Group, is forecasting an annual sales decline of 2 to 4 percent versus prior guidance of “flat to up slightly,” but annual gross margins should improve. 

• Crocs is working on a strategy to bolster the fortunes of its Heydude business that includes greater segmentation by distribution channel. Heydude is now forecast to surpass $1 billion in annual sales in 2024. 

• Wolverine is projecting FY23 total revenues to be down by 13 percent as it continues its corporate overhaul under CEO Chris Hufnagel. 

• Skechers unveiled its first collection of technical basketball shoes in October, for sale in North America, China and the Philippines. 

• Shimano, despite pointing to serious signs of weakening demand ahead, reported stable demand for bicycle and fishing tack during the first nine months of 2023. 

• XXL ASA continued to see improved sales of apparel and footwear in Q3 while equipment sales remained challenging and e-commerce revenues fell by more than 14 percent. 

• Lululemon is eying its men’s business and footwear for him as growth engines in 2024. Every region in the EMEA grew its brand revenues by double-digits in Q3. 

• Fenix Outdoor is promising to spend more on marketing, particularly in Germany and the US, to better convey its brand message to consumers. 

The SGI Europe Sporting Goods Industry Scorecard Q3 2023

About these numbers

Our Q3 2023 Sporting Goods Industry Scorecard provides an overview of top performers by sales and profit for the period ended on or closest to September 30. All entrant revenues, if not reported in euros, were converted to the currency at the average rate for the period as calculated by fxtop.com