Q1 Athletic Footwear Analysis

Q1 2010 SportsONESource Footwear Executive Summary

April results were in line with the quarter results, both up high single digits. There has been no slow down in the sales of athletic Footwear as claimed by others. Sales were choppy but they always are this time of year, when volume is lower. Also, anecdotally retailers seem to be much less promotional than in previous years which will have a moderate negative impact on sales trend.

Some headlines from April:

* Sales trend did slow up at the mall as Jordan slowed dramatically during April, well off the quarter trend.

* Skechers grabbed the #2 market share from Jordan for April (8.2% vs. 7.9%)

* Nike Women’s market share declined again buy nearly 20% (-700 basis points). Nike Women’s sales were down in the mid singles while all Women’s sales grew in the mid teens

* Toning remained very strong and is now on track for $1.25 billion. Skechers lost some share to Reebok but both continue to grow rapidly.

* The Sandal business exploded to a 25% increase on the warmer than normal weather

The strong run for Athletic Footwear in Q2 continued, showing no signs of abating. Sales for the 13 week period grew 10% vs. one year ago. Sales at Family Footwear remained strongest, as they continue to execute the Toning trend better than the other channels. The Mall had a good quarter on strong Jordan sales early, lightweight Running and to a lesser extent than Family, Toning. Full Line had a solid quarter as well. Sales were soft in the mid tier department stores.

Men’s and kid’s sales for the quarter improved in the mid singles. Women’s improved in the mid teens. Nike brand Women’s declined in the mid singles, as Nike lost 700 basis points in share (about 20% of their market share).

Toning remains the hottest story for the industry. Two thirds of the sales gain for the quarter came from Toning. Skechers had a 72% share in Toning, although that number declined as we moved through the quarter as...