Sizing Up Boot Sales
It appears boot sales aren't taking a hike anytime soon.
At a time when retailers are trying to create enthusiasm for Spring, the harsher than usual winter is creating the perfect storm for boot demand.
"Sales have been stronger later in the season as a result of the weather. I saw that in the latest earnings report from Columbia and I expect I will see it in the upcoming report from Timberland," said Wall Street Strategies Equity Research Analyst Brian Sozzi.
Sozzi sized up boot sales in his December 9th research note. He predicted lean inventories at retail and harsh global weather conditions are welcoming news for the purveyors of boots.
Since then, boot companies have not been treading lightly.
Sterne Agee Managing Director Samuel Poser said demand is expected to stand firmly into Spring.
"Boots are becoming an all year item. Girls are wearing them with shorts and guys wear them hiking," said Poser. "The boot trend is accelerating."
Heels down, Poser believes Deckers Outdoor Corporation, the maker of Uggs, has the best momentum going into Spring.
He thinks a lot of the company's new styles, such as the Lynnea, will continue to have a lot of traction among consumers. The Lynnea is currently on back order on Uggs.com until March 17th.
Poser said they have the "Uggs DNA, but don't scream Uggs," and that's propelling Deckers forward.
To boot, companies such as Wolverine which sell the "vintage Americana" look could also see big profits the way Doc Martins did in the early 1990s explained Poser. Wolverine makes shoe brands such as Hush Puppies and Merrill.
So, it's been easy to find a buyer at the mall. But, what about on Wall Street?
"I would think most footwear companies will end with low inventory in the boot category as forecasts for the holiday season were conservative," said Jeff Klinefelter. Piper Jaffray Senior Retail Analyst. "This will help to lift Q4 profits nicely. It is not too late to participate in the strong boot trend, as both Decker and Genesco should continue to benefit next year with better inventory positions and expanded assortments."
Bottom line: If the boot fits... it could create some sensible investing for your portfolio.
Stephanie is Squawk Box producer and senior NetNet retail correspondent. Follow her on twitter @StephLandsman
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