The top sporting goods industry performers by sales and profit Q1 2023

• The sporting goods industry Q1 numbers at at glance
• How did sporting apparel companies perform in Q1 2023?
• The sales and profits of the biggest footwear companies in Q1 2023
• Sales and profits in the sporting goods Equipment sector Q1 2023
• How did the sporting goods Diversified/Retail sector perform in Q1 2023?
• Key developments in the sporting goods industry in Q1 2023
• The SGI Europe Sporting Goods Industry Scorecard Q1 2023

The sporting goods industry Q1 numbers at a glance

The quarterly results, from a return on sales (RoS) perspective, rebounded from a 4.0 percent decline in Q4 2022 to a +4.7 percent improvement. The aggregate industry profit, however, declined by 28 percent, impacted by losses at 15 companies, as the RoS fell to 4.7 percent from 7.2 percent in Q1 2022. 

Year-over-year RoS was again down in each sector (Apparel, Footwear, Equipment, and Diversified/Retail), with this most pronounced, once again, in Equipment. Here, a negative result (-0.73 percent) for a second consecutive period was due largely to the most recent quarterly results from Peloton Interactive. Excluding results from the connected fitness company in both years, RoS within Equipment would have been +1.5 percent versus +10.6 percent in Q1 2022.

Industrywide sales growth rose by 9.3 percent after more than 17.5 percent expansion in Q4 2022, even as macroeconomic pressures impacted several geographies, including North America.

The Apparel and Footwear segment both posted double-digit, year-over-year sales increases. The small Diversified/Retail sector generated a nearly 7 percent year-over-year gain in revenues. The Equipment segment, meanwhile, was essentially flat. 

How did sporting Apparel companies perform in Q1 2023?

The seven-firm segment, including Under Armour and VF Corp., realized a decline in its quarterly RoS to 0.4 percent from 2.7 percent after generating a 13.0 percent RoS in Q4 2022. Segment profitability slipped by nearly 82 percent, hurt by a huge loss at VF Corp.

Excluding results from The North Face parent, segment profit in Apparel would have soared by 278 percent in Q1 2023 to more than €235 million.

Regardless, total sales in Sporting Apparel increased by 11.1 percent, despite the 14.9 percent decline at Hanesbrands reported in their latest earnings. This is better than the 10.53 percent gain in Q4 2022. 

The sales and profits of the biggest Footwear companies in Q1 2023

RoS in the 17-entrant sector, including Adidas, Nike and Asics, declined to 6.7 percent from 9.6 percent in Q1 2022, as three companies – Allbirds, Rocky Brands, and Yue Yuen – reported year-over-year sales declines. Despite its recent troubles, Adidas’ revenues came in essentially flat.

Nike accounted for 61.3 percent of sporting footwear brand segment revenues, which were up by nearly 12.6 percent year-over-year.

Ten companies, led by On Holdings, Crocs, and Asics Corp. reported double-digit sales increases. However, aggregate sector profitability was impacted by nine firms with lower year-over-year profit and four (Adidas, Allbirds, Alpargatas, and Rocky Brands) that recorded a quarterly loss.

Sales and profits in the sporting goods Equipment sector Q1 2023

For a second straight period, the 18-company sporting goods Equipment sector – which includes GoPro, Yeti, Dometic and Peloton – generated a negative RoS. Five companies (American Outdoor Brands, GoPro, Nautilus, Peloton Interactive, and Vista Outdoor) reported a quarterly loss, and 13 companies had lower year-over-year profits.

RoS was -1.9 percent versus 0.8 percent in Q1 2022. Excluding Peloton results for the comparable quarters, RoS was 1.5 percent against 10.6 percent, and sector profitability was roughly €106.1 million versus €740 million. 

How did the sporting goods Diversified/Retail sector perform in Q1 2023?

The six-entrant sector – which includes Foot Locker, Garmin, and Lululemon – achieved an RoS of 8.3 percent, down from 9.8 percent in the year-ago quarter, as Newell Brands and Zumiez reported lower year-on-year revenues.

Total sector revenues increased by nearly 7 percent from Q1 2022, but would have been down by 2 percent, excluding the yearly sales contributions from Lululemon. Profitability fell by nearly 8.9 percent as three companies had lower earnings and three reported a quarterly loss.

Some of the biggest financial stories from the sporting goods industry so far this year

• Hanesbrands, which realized a 19 percent decline in quarterly activewear sales and a 17 percent drop in global Champion sales, is undergoing a “strategic channel clean-up” in the U.S. market.
• Under Armour is focusing on brand and product as it expands in footwear, women’s and a “Sportstyle” segmentation under CEO Stephanie Linnartz.
• Adidas, bracing for a “bumpy year,” is anticipating its full-year, currency-neutral sales to decline by high-single digits.
• Crocs expects markets outside the U.S. to generate its highest sales growth rates this FY as the group eyes total annual revenues in the $3.95 to $4.05 billion range.
• Puma, coping with higher market promotional activity and freight costs, posted strong Q1 sales growth in Greater China and the direct-to-consumer channel.
• On Holdings is eying annual revenues approaching €1.79 billion this year after reporting 78 percent Q1 sales growth.
• Vulcabras’ strong group results in Q1 were aided by its expansion of Mizuno and Under Armour footwear in Brazil and higher Apparel/Accessories sales.
• Fenix Outdoor sees investments in automated logistics and information technology generating lower costs in 2024.
• Shimano, which is forecasting a 20 percent decline in 2023 sales, realized a 12.5 percent drop in Q1 revenues as the bicycle sector continues to be impacted by high inventory levels.
• Foot Locker has dialed back its FY23 revenue, comp sales and gross margin outlooks, calling the 12-month period “a reset year.”
• Lululemon, which reported strong Q1 results that were aided by a 30 percent increase in store traffic, says the brand is off to a great start in Spain. The company has opened Israel as its twenty-fourth market and will debut in Thailand in the coming months.

The SGI Europe Sporting Goods Industry Scorecard Q1 2023

About these numbers

Our Q1 2023 Sporting Goods Industry Scorecard provides an overview of top performers by sales and profit for the period ending March 31, 2023. 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