8 Footwear Stocks With Upside

NEW YORK ( TheStreet) -- More than 37% of shoppers and 42% of women shoppers intend to do part of their holiday shopping by Halloween, falling on Oct. 31, 2011, reports a National Retail Federation (NRF) consumer survey. Retailers are elated as they are close to the forecasted $450 billion of holiday spending.

ShopperTrak, a Chicago-based consulting firm, reports retail sales are likely to increase by 3% during Nov.- Dec. 2011. Retail sales in the U.S. sprinted 7.2% in August compared to the same month in 2010, as per the Commerce Department.

Based on latest quarterly results and analysts' buy, hold recommendations, these eight footwear stocks have potential upsides ranging from 16% to 132%. On average, these stocks have buy recommendation of 56% and hold rating of 30%, based on a Bloomberg consensus.

The stocks are listed in ascending order of upside potential.


8. Under Armour ( UA) engages in the development, marketing and distribution of branded performance apparel, footwear and accessories for men, women and youth.

Of the 27 analysts covering the stock, 33% recommend buying and 63% suggest a hold. The stock's average 12-month price target is $76.00, which is 17.7% higher than the current price, as per a Bloomberg consensus.

For the second quarter of 2011, the company reported net revenue of $291.3 million, an increase of 42% from the same quarter prior year. Diluted earnings per share rose to 12 cents from 7 cents recorded in the second quarter of 2010. Net income increased to $6.2 million in the second quarter of 2011 compared with $3.5 million in the second quarter of 2010.

The company has raised its full year revenue guidance to a range of $1.42 to $1.44 billion from the previous view of $1.37 to $1.39 billion, indicating 33% to 35% growth over 2010 levels. Meanwhile, operating income guidance range is raised to $155 to $160 million from the earlier range of $149 to $153 million, up 38% to 42% from 2010 levels.

7. NIKE ( NKE) is a footwear and apparel giant engaged in the design, development and marketing of footwear, apparel, equipment and other consumer accessories. NIKE sells athletic footwear and athletic apparel through retail accounts, retail stores, Internet sales, and through a mix of independent distributors and licensees worldwide.

Of the 23 analysts covering the stock, 65% recommend a buy and the rest rate a hold. Its average 12-month price target is $100.58, up 21.1% from the current price, as per a Bloomberg consensus.

For the first quarter of 2012, the athletic shoemaker reported 18% surge in revenue to $6.1 billion. Net income grew 15% to $645 million, while diluted earnings per share rose 19% to $1.36. At the end of the quarter, worldwide futures orders for the NIKE brand athletic footwear and apparel, scheduled for delivery from Sep. 2011 through Jan. 2012 totaled $8.5 billion, indicating 16% growth from the same period last year.

NIKE recently announced the launch of its venture capital arm Sustainable Business & Innovation Lab to invest in start-ups in renewable energy, efficient manufacturing and healthy lifestyles.

For fiscal 2012, sales are forecast to rise as demand strengthens in North America. Revenue for the year is now seen increasing in the low- to mid-teen percentage range as compared to the previous range of high-single to low-double digits provided in June. Gross margins are also estimated to improve in the second half of the year.

6. Wolverine World Wide ( WWW) is a designer, manufacturer and marketer of a range of casual shoes, performance outdoor footwear and apparel, industrial work shoes, boots and apparel, and uniform shoes and boots. Broadly, its footwear products are organized under four operating units: the Outdoor Group, the Wolverine Footwear Group, the Heritage Brands Group and The Hush Puppies Company.

Of the 13 analysts covering the stock, 38% recommend buying and the rest suggest a hold. There are no sell ratings on the stock. The stock's average 12-month price target is $43.63, which is 26% higher than the current price, as per a Bloomberg consensus.

The company recorded revenue of $361.6 million for the third quarter of 2011, an increase of 12.9% from the year-ago quarter, driven by significant growth from Outdoor Group, Lifestyle Group and Consumer Direct Businesses. Outdoor Group recorded revenue growth of 19.9%. Gross margin expanded 44 basis points, while operating margin grew 60 basis points. Net earnings increased to $40.4 million from $34.1 million in the third quarter of 2010. Diluted earnings per share rose 17.1% to 82 cents.

The company recently launched a concept shoe store, extending its involvement in the downtown area of West Michigan and providing high-profile boost to the downtown retail scene. The store may also carry some limited-run shoes and apparel.

The company has raised its full-year revenue to a range of $1.4 to $1.43 billion, or a growth of 12.1% to 14.5% from the previous year. Meanwhile, diluted earnings per share are seen in the range of $2.46 to $2.52, rising 13.4% to 16.1% from the prior year's adjusted earnings per share.

5. Deckers Outdoor ( DECK) is a designer, producer, marketer, and brand manager of footwear and accessories. It sells products under two brands: UGG and Teva. Other brands include Simple, TSUBO and Ahnu.

Of the 15 analysts covering the stock, 80% recommend buying and the rest rate a hold. There are no sell ratings on the stock. Its average 12-month price target is $113.27, which is 28.6% higher than the current price, as per a Bloomberg consensus.

For the second quarter of 2011, DECK reported 12.5% increase in net sales to $154.2 million from $137.1 million in the year-ago quarter. UGG sales were up 8%, while Teva sales escalated 29.1% for the quarter. Retail sales jumped 102.2% to $20.1 million, while same-store sales were up 23.6%.

The company recently signed a purchase and sale agreement for acquiring nearly 14 acres in Santa Barbara County in California for $20.4 million for its new headquarters.

For the third quarter, the company expects revenue to increase by almost 38% and diluted earnings per share by 22% over the 2010 levels. Revenue for the fourth quarter is projected to rise 22%, while diluted earnings per share are seen growing 36%. For full year 2011, revenue is now expected to increase almost 26% over 2010 levels compared to the earlier guidance of 21%. Meanwhile, the newly acquired Sanuk brand is expected to generate sales in the low $20 million range in the second half of the year. Full-year diluted earnings per share are seen increasing 17% from 2010 levels, vs. the previous view of 13%.

4. LaCrosse Footwear ( BOOT), a developer and marketer of footwear for work and outdoor use, operates under the brands Danner and LaCrosse. The company distributes its products through a network of retailers and distributors, and internationally through its Danish subsidiary LaCrosse Europe ApS, and through distributors and retailers in Asia, Europe and Canada.

Of the four analysts covering the stock, two recommend a buy and one suggests a hold. The stock's average 12-month price target is $18.00, which is 40.5% higher than the current price, as per a Bloomberg consensus.

For the second quarter of 2011, BOOT reported net sales of $27.1 million, vs. $26.6 million in the same quarter prior year. For the first half of 2011 and the second quarter, the company's combined sales to its wholesale, direct and international channels increased 13%, vs. the same period last year. Also, the company's board approved and paid a quarterly dividend of 12.5 cents per share of common stock.

Looking ahead, the company believes that its enhanced e-commerce platforms will continue to expand its direct business and with the support of a talented development team it plans to launch a range of innovative products for spring 2012.

BOOT recently received a $15.4 million delivery order for the United States Marine Corps for Danner's USMC Rugged All-Terrain (RAT) hot-weather boot. The company expects to fulfill this order of RAT boots through multiple deliveries over the next several quarters.

3. Steven Madden ( SHOO) designs, sources, markets and sells footwear for women, men and children and private label fashion handbags and accessories. It operates under five categories: wholesale footwear, wholesale accessories, retail, first cost and licensing.

Of the six analysts covering the stock, four recommend buying and the rest rate a hold. There are no sell ratings on the stock. Its average 12-month price target is $45.50, which is 60.4% higher than the current price, as per a Bloomberg consensus.

Net sales for the second quarter of 2011 increased 31.8% to $209.2 million from the year-ago quarter with retail comparable-store sales rising 11.6%. Meanwhile, second-quarter net income increased 20.1% to $23.8 million, or 55 cents per diluted share, from $19.8 million, or 47 cents per diluted share, in the same quarter prior year. Including the internet store, the company had 83 retail locations at the end of the quarter.

Recently, SHOO announced a deal with BasicNet S.p.A. to become the exclusive licensee for the Superga brand in North America. The Superga is exclusive to premier department stores and high-end specialty footwear boutiques.

For full year 2011, the company estimates net sales to increase in the range of 47% to 49% as compared to 2010 levels. Diluted earnings per share are now forecast to range from $2.15 to $2.20 from the previous guidance of $2.03 to $2.10.

2. Crocs ( CROX), operating through consolidated subsidiaries, is a designer, manufacturer, distributor, marketer and brand manager of footwear and accessories for men, women and children worldwide. The company utilizes closed cell-resin called Croslite for its footwear and accessories. The footwear products are divided into four offerings: Core, Active, Casual and Style.

Of the eight analysts covering the stock, six recommend buying and the rest suggest a hold. There are no sell ratings on the stock. Its average 12-month price target is $35.40, which is 60.9% higher than the current price, as per a Bloomberg consensus.

For the second quarter of 2011, the company recorded 29.6% increase in revenue to $295.6 million from the year-ago quarter. Net income expanded to $55.5 million, or 61 cents per share, from $32.3 million, or 37 cents per share, in the same quarter last year. Wholesale and retail sales sprinted 25.5% and 38.1%, respectively. Internet sales jumped 30.1%. At the end of the second quarter, the company had order backlog of $168.1 million, an increase of 41.9%.

The company recently announced a new golf line, designed in partnership with world-renowned golf instructor Hank Haney. The collection will launch in the spring of 2012 featuring several men's and women's styles.

For 2011 third quarter, the company pegs revenue at $280 million, an increase of 30% from the third quarter of 2010. Meanwhile, CROX forecasts diluted earnings per share at 40 cents for the third quarter.

1. K-Swiss ( KSWS) designs, develops and markets an array of footwear, apparel and accessories for athletic, sports and fitness activities and casual wear under the K-Swiss brand. The company sells products through website and retail locations under its Palladium and Form Athletics brands.

Of the five analysts covering the stock, one recommends buying and two rate a hold. The stock's average 12-month price target is $9.25, which is 131.8% higher than the current price, as per a Bloomberg consensus.

For the second quarter of 2011, the company's total worldwide revenue increased 40% to $65.5 million from $46.83 million in the year-ago quarter. Domestic revenue grew 43.5%, while international revenue jumped 36.6%. As of Jun. 2011, worldwide futures orders with start-ship dates from July through December 2011 increased 39.2% to $89.9 million. Cash and cash equivalents stood at $45.2 million at the end of Jun.2011.

For 2011, the company estimates consolidated revenue to be 25% to 30% above 2010 levels. Meanwhile, selling, general and administrative expenses are seen ranging from $155 million to $160 million due to continued support from marketing initiatives.

>>To see these stocks in action, visit the 8 Footwear Stocks With Upside portfolio on Stockpickr.

If you liked this article you might like

Closing Bell: LIVE MARKETS BLOG

Closing Bell: LIVE MARKETS BLOG

Haters Have an Incredible New Chance to Send the Bull Market in Stocks Crashing

Haters Have an Incredible New Chance to Send the Bull Market in Stocks Crashing

The Long-Awaited Stock Market Correction Is Lurking

The Long-Awaited Stock Market Correction Is Lurking

Cramer: The Stock Market Had Three Sessions

Cramer: The Stock Market Had Three Sessions

Amazon Won't Be Only Retailer Alive in 5 Years

Amazon Won't Be Only Retailer Alive in 5 Years