The top sporting goods industry performers by sales and profits in Q2 2023

• The sporting goods industry Q2 numbers at at glance
• How did sporting apparel companies perform in Q2 2023?
• The sales and profits of the biggest footwear companies in Q2 2023
• Sales and profits in the sporting goods Equipment sector Q2 2023
• How did the sporting goods Diversified/Retail sector perform in Q2 2023?
• Key developments in the sporting goods industry in Q2 2023
• The SGI Europe Sporting Goods Industry Scorecard Q2 2023

The Q2 sporting goods industry at a glance 

Quarterly results, from a return on sales (RoS) perspective, improved from Q1, coming in at 5.6 percent versus the prior period’s RoS of 4.7 percent. However, both aggregate industry profits and sales declined.

Combined profit fell by nearly 3.9 percent, impacted by losses at nearly a third of the companies analyzed. Corresponding total sales were 2.4 percent lower year-over-year at €45.3 billion against a 9.3 percent increase in Q1 and a 17.5 percent improvement in Q4 2022. 

The two largest segments by number of entrants, Footwear and Equipment, each posted improved year-over-year and quarter-to-quarter (Q1 to Q2 2023) RoS despite lower year-over-year sales. The Apparel and Diversified/Retail segments each suffered double-digit drops in year-over-year profitability and lower aggregate sales. 

How did Sports Apparel firms perform in Q2 2023?

Severely impacted by more than €50 million net losses at both Canada Goose and VF Corp., the seven-company segment achieved a negative RoS of -2.0 percent against -1.0 percent in Q2 2022 and 0.4 percent on the plus side in Q1 2023.

Four of seven entrants, led by a nearly 21 percent drop at Hanesbrands-Activewear, had lower year-over-year sales. Only Canada Goose, Columbia Sportswear and Revolution Race posted sales growth, as aggregate revenues declined by more than 6.9 percent. 

The performance of the biggest Footwear companies in Q2 2023?

The 17-firm segment generated RoS of 5.8 percent, which was positive but lower than the RoS of 8.6 percent in the year-ago period or the RoS of 6.7 percent in Q1 2023 – this despite essentially flat aggregate revenues and a more than 32 percent decline in profitability, as four entrants reported a loss.

Nike, which was responsible for more than 61 percent of Q1 2023 sales, accounted for 42 percent of segment sales in Q2.

Six of the nine companies reporting lower year-over-year sales – Allbirds, Alpargatas, Grendene, Rocky Brands, Wolverine Worldwide and manufacturer Yue Yuen – had a double-digit falloff. 

Sales and profits in the sporting goods Equipment sector in Q2 2023

Thanks to dramatically improved results at Peloton, which still reported a quarterly loss on lower sales, the 18-company Equipment segment reported a positive RoS of 5.9 percent, against -1.9 percent RoS in Q1 2023 and -4.5 percent RoS in Q2 2022.

With the interactive fitness company excluded from the group, RoS in the current period was a positive 10.7 percent. Still, it should be noted that three other companies – American Outdoors, Clarus Corp. and GoPro – also reported a quarterly loss.

Fifteen of the entrants (83%) had lower year-over-year sales. Both year-over-year revenues and profits declined for the entire segment. 

What about the sporting goods Diversified/Retail sector in Q2 2023? 

Segment aggregate profitability slipped by more than 16 percent, despite a dip of only 1.4 percent in year-over-year revenues. This dip is remarkable insofar as four out of six companies reported double-digit declines in year-over-year sales.

RoS was nearly on par with that of Q2 2022, at 5.6 percent versus 5.7 percent, and higher than Q1’s 4.7 percent.

Lululemon contributed more than 36 percent of the sector’s revenues and 57 percent of its profits. Half of the six entrants – Foot Locker, XXL Asa, and Zumiez – reported a quarterly loss.

Key developments in the sporting goods industry this quarter

• Columbia Sportswear adopts a more conservative FY23 outlook over bloated inventories and challenging conditions in the U.S., despite explosive growth in China. 
• VF Corp., which has a new president in Bracken Darrell, sees continued momentum in its North Face brand thanks to DTC and China. 
• Asics thinks its financial year revenues will grow by 8 percent in yen to the equivalent of €3.7 billion. 
• Nike is partnering with FitLab to open a network of boutique gyms in the U.S. under a Nike Studios nameplate. 
• Topgolf Callaway maintains its FY consolidated net revenue range target of $4.4 to $4.47 billion when reporting a 17 percent increase in Q2 Topgolf segment sales. 
• GoPro sees the new go-to-market strategies of re-introducing entry-level price point cameras and restoring camera prices to lower, pre-pandemic levels begin to gain traction. 
• Clarus Corp. blames a more promotional retail environment and inventory de-stocking for its Q2 woes, despite generating positive cash flow during the period.
• Garmin posts nearly 12 percent growth in Q2 profits, as its fitness segment achieved a 16 percent operating margin during the period.
• Foot Locker, saddled with an 11 percent year-over-year increase in inventory and persistent challenges to its business, decided to pause its shareholder dividend.

The SGI Europe Sporting Goods Industry Scorecard Q2 2023

About these numbers

Our Q2 2023 Sporting Goods Industry Scorecard provides an overview of top performers by sales and profit for the period ended on or closest to June 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