Overall, 2024 was a year of underperformance when it comes to Retail stock. The SPDR S&P Retail ETF NYSEARCA: XRT Finished the year with a total return of just under 12%. That’s about half the return generated by the S&P 500 index. However, there were several standouts in the industry, particularly three stocks based in Europe. Two of them returned more than 100% on the year, while another outperformed the industry ETF by more than 4%. Below, I’ll break down these names and give my take on why they may continue to grow into 2025.
On the holdings: Making big strides in the footwear market
on the NYSE: ONONThe Swiss athletic footwear maker had a stellar 2024. The company’s value more than doubled, with shares returning 103%. Sales growth has been strong and fast. Revenues grew and reached more than 20% every quarter North of 30% in Q3. Margins also rose slightly to their highest quarterly level in Q3, up 60 basis points from the year-ago period.
Stock forecast today
$56.77
Up 3.66%buy medium
Based on 24 analyst ratings
| High forecast | $66.00 |
|---|---|
| Average forecast | $56.77 |
| Less predictable | $34.00 |
There was a huge tailwind struggle for ON in the last few years Nike NYSE: NKE. As Nike worked to expand its direct-to-consumer (DTC) channel to increase margins, it made a critical error in its thinking. Like retail stores foot locker NYSE: FL Get less Nike merchandise because of Nike’s DTC efforts, so they need it Different products to fill your shelf.
That’s where companies like On come in, filling holes in footwear retailer inventory. This provided strong brand exposure. In addition, On introduced innovative new products, while Nike lagged behind on that front. Nike is now going through a corporate shakeup with a new CEO. This gives it the ability to continue to grow into 2025. Analysts are cutting their earnings forecasts on Nike as it looks to normalize its inventory levels and bring sports back to the center of its product line. This gives ON the opportunity to continue to take market share as Nike repositions. Additionally, On is working to further expand into apparel, which accounts for just 4% of revenue. This is another huge market that the company can potentially tap into.
Amer Sports: Ready to move on after paying off debt
Amer Sports NYSE: AS is a Finnish sportswear company that has grown rapidly even in 2024. Revenue grew 13% in Q1 and Q3 grew by 17%. The company’s technical apparel segment, led by its luxury Arc’teryx brand, grew 34% last quarter.
Amer sports stock forecast today
$25.14
-10.08% declinebuy medium
Based on 16 analyst ratings
| High forecast | $37.00 |
|---|---|
| Average forecast | $25.14 |
| Less predictable | $16.00 |
It expanded its adjusted operating margin by 280 basis points in Q3, surpassing its prior guidance. Growth in Asia has also been exceptional. Revenue in China grew 56% and Asia Pacific revenue grew 47%. Excluding first-day changes, the company’s shares have gained 108% since its initial public offering in March.
One of the biggest eyesores surrounding Amer Sports was its massive $2.8 billion debt. It recently went a long way in rectifying this issue through another public offering of stock. It raised $1.1 billion to pay off debt. S&P Global Ratings later Raised your credit rating on Amer at BBB, moving its rating to the investment-grade category. With this problem alleviated, the company can focus more on its push into China.
The high-end Arc’teryx brand has been one of the key sales growth drivers in China. The premium price aligns well with the socioeconomic demographics in China, which suffers from Significant income inequality. Affluent consumers can remain more resilient and continue to demand these products even as macroeconomic conditions fluctuate.
Birkenstock: The capital investment could be set to pay off in 2025
Birkenstock NYSE: Berk Shares had an up-and-down year in 2024, ending with a total return of 16%. It underperformed in the broader market; However, it significantly outperformed its overall industry.
Birkenstock stock forecast today
$68.31
Up 20.57%buy medium
Based on 17 analyst ratings
| High forecast | $95.00 |
|---|---|
| Average forecast | $68.31 |
| Less predictable | $58.00 |
The German sandal maker sees revenue growth close to or above 20% every quarter through 2024. Key profitability and growth drivers could potentially help lift Birkenstock shares higher in 2025.
The company has invested heavily to increase its production capacity. This hurt the company’s gross margin in 2024. However, it sets it up to boost sales and further capitalize on strong demand in Asia. Revenue from Asia grew 42% last quarter. Additionally, the company’s strong growth in its DTC channel could help drive margin expansion in 2025. An average of six Wall Street price targets issued after the company’s latest earnings report suggests a 33% gain in shares.
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