Retailers recently announced their quarterly earnings, showing that American shoppers are selectively buying non-essential items, foregoing electronic products, but generously opening their wallets for popular items like wide-leg jeans they have been dreaming of.
According to Reuters, this trend has driven sales of popular products such as Birkenstock, Abercrombie and Fitch’s jeans (A&F), and Vuori’s athleisure wear.
Analyst Zak Stambor of research firm Emarketer noted that consumers are becoming more discerning about where and when they spend their money. “They seem willing to spend on higher-priced items.”
Data from market research company GlobalData shows that compared to the same period last year, demand for trendy products has boosted clothing sales by 3.2% in the first quarter of 2024, sports equipment by 1.9%, and footwear by 0.4%.
However, big-ticket items, especially those related to living spaces, have disappeared from consumers’ shopping lists. Sales of electronic products in the first quarter declined by 1.9% compared to the same period last year, while purchases of home goods decreased by 4.2%.
Joseph Feldman, an analyst at Telsey Advisory Group, noted, “Outdoor grills, patio furnishings… TVs, sofas, beds, sales of these products have faced some challenges lately.”
“During the pandemic, demand surged early on, but we are still in the process of coming down from those highs, so you can still see some softness.”
This difference is evident in the stock prices of retailers. A&F’s stock price nearly doubled this year, while Home Depot’s stock price fell by 4.5%.
Last week, executives at Nordstrom stated that the first-quarter sales growth of sportswear and footwear was driven by several popular brands, including Vuori, Hoka, and Adidas. The department store has dedicated space to sell Roger Federer-endorsed On sneakers, Sam Edelman sandals, and Birkenstock shoes.
David Swartz, an analyst at Morningstar, said, “Stronger retailers are performing well in the U.S., innovative brands are also doing well. Other retailers, like department stores, are just trying to find a way to achieve this goal.”
Dick’s Sporting Goods, in a call with investors, outlined its plan to continue its strategy of offering popular brands like Hoka and On sneakers.
Last week, due to strong demand for footwear and athletic wear, the sports goods retailer raised its annual profit and sales forecast. Its stock price has risen by nearly 45% this year.
Consumer Edge, a New York-based research company serving hedge fund and private equity clients, found that after analyzing around 40 million U.S. credit card transaction data points, consumers spent about 30% more on Vuori activewear and 25% more on Skims lingerie compared to the same period last year, ending May 28.
Skims is a lingerie company owned by Kim Kardashian, expected to go public later this year or in 2025. Last year, Reuters reported that Skims was in talks with investment firm Wellington Management for a new round of financing, valuing the company at around $4 billion.
Consumer Edge also noted an increase in spending on A&F products, as well as Hoka and On footwear compared to a year ago.