NEW YORK (TheStreet) --Teens and millennials continue to prefer being comfortable in their clothing while having a sense of style at the same time.
And several major retailers are still cashing in on the trend toward wearing fashionable active apparel. "The casualization of our customer base is here to stay," remarked Foot Locker (FL) - Get Report chairman and CEO Dick Johnson on a call with analysts Friday, referring to consumers dressing up in slim-fit jogging pants and sneakers.
Johnson may have made quite the understatement on the key style trend fueling Foot Locker' s business.
The footwear retailer reported second quarter same-store sales of 9.6%, continuing a yearlong stretch of impressive gains in part due to more people adopting casual looks. Foot Locker's sales were driven by solid demand for colorful hightop basketball sneakers that make an outfit consisting of comfortable jogger pants and a t-shirt pop.
Basketball sneaker sales rose by a high-single digit percentage in the quarter, led by Nike (NKE) - Get Report styles based on sponsored athletes LeBron James, Kobe Bryant, and Kevin Durant. Foot Locker also saw "stellar" sales of basketball sneakers for up-and-coming NBA stars such as Kyrie Irving (sponsored by Nike) and Stephen Curry (sponsored by Under Armour (UA) - Get Report ). At the Foot Locker's Footaction and Champs divisions, sales of jogger pants sold well, according to Johnson.
Foot Locker's overall footwear sales increased by a double-digit percentage in the quarter. Domestic online sales surged 40%, and now represent about 11.3% of Foot Locker's business versus 10.5% year ago. The online business is likely being propelled by a larger selection of basketball sneakers and casual apparel than found at a typical Foot Locker store.
"The athletic shoes business in the U.S. is growing in the high single digits (percentage) for the year so far," pointed out NPD Group sports industry analyst Matt Powell via email, underscoring the trend toward stylish but relaxed dressing.
Foot Locker is not alone in benefiting from the trend.
Added Kessler, "We're definitely seeing the customer respond to flex denim, and it's making a significant contribution to the men's and women's denim business."
Similar to Foot Locker, strong interest in fashionable, comfortable clothes boosted the sales line for American Eagle in the second quarter. Same-store sales surged 11%, while earnings per share came in at $0.17, up significantly from $0.03 a year earlier. American Eagle's store traffic outpaced mall traffic, said execs, no small feat as consumers increasingly shop online.
Even department store Macy's (M) - Get Report , which had a challenging second quarter, benefited from the casualization trend. According to Macy's CFO Karen Hoguet on an Aug. 12 call, sales of activewear were strong during the second quarter. Unfortunately, strength in the Nike, Under Armour and private label activewear departments couldn't offset sluggish sales for Macy's in categories such as housewares, watches and petite clothing. Second quarter same-store sales fell 1.5%.
At Dick's Sporting Goods (DKS) - Get Report , execs are hopeful that slim-fitting comfy joggers and bright-colored basketball sneakers will drive solid sales for the back to school season. "We're enthusiastic about the fashion trend in athletic apparel for back-to-school, in particular for men and women on the bottom's category," said Dick's Sporting Goods chairman and CEO Ed Stack on an Aug. 18 earnings call. Stack added that sales of basketball and casual sneakers are growing faster than running styles.
"We are in a period where athletic footwear and apparel are driving retail," concluded NPD Group's Powell.
With that being the case, investors may want to take another look at the company that arguably started the trend toward fashionable workout gear: yoga apparel maker Lululemon (LULU) - Get Report . Shares of Lululemon are down about 5.4% in the past six months on fears of slowing growth, which appears unlikely in light of strong second quarter results from several of its competitors in the activewear category.