ELY - B. Riley expects footwear stocks to stand firm amid market turmoil

In a note updating clients on retail trends ahead of a busy earnings season, B. Riley analyst Susan Anderson advised “staple-like product” manufacturers are still providing opportunity.

She noted that retail sales have held up well into the second quarter despite economic turmoil and that growth opportunities exist across the space where pent-up demand exists and staple-like demand sustains sales. Namely, Anderson highlighted footwear manufacturers as “top picks” in the space, with trends suggesting the segment should hold up amid a market downturn.

“We like [Steve Madden] ( NASDAQ: SHOO ) as consumers continue to restock on fashion,” she wrote. We also believe [Rocky Brands] ( NASDAQ: RCKY ) and [Wolverine World Wide] ( NYSE: WWW ) are more insulated from a potential slowdown in consumer spending due to their exposure to the staple-like work footwear category along with strong online trends for WWW’s Merrell and Saucony.”

All three were reiterated at a “Buy” rating, with EPS estimates increased for the second quarter. In each case, Anderson expects above-consensus EPS reports.

Elsewhere, Callaway ( ELY ) and Carter’s ( CRI ) were cited as promising opportunities due to “pent up demand” and “staple-like need for baby/children’s apparel”, respectively. Higher birth rates noted in 2021 were also noted as a significant tailwind for the latter.

Read more on Wolverine’s latest trademark deal with Hanesbrands .

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