Shoppers Love Cheap Shoes, but Wall Street Prefers Deckers and Columbia Sportswear | The Motley Fool

Similarly, Merrill observed promotional activity at Under Armour archrival Nike. As Ohmes noted, “following a favorable launch schedule in November,” sales of Jordan-brand shoes “have decelerated meaningfully.” Merrill highlighted “below retail” pricing on Jordan Retro 6 and Retro 13 shoes. Despite the fact that both brands were launched less than two weeks ago, they’re already going on sale, which doesn’t say much good about Nike’s pricing power.

3. So who’s not on sale?
In contrast, Merrill says that Deckers Outdoor (known best for its UGG and Teva brands) and Columbia Sportswear are both refusing to play the discount game.

To the contrary, Merrill spotlighted UGG for taking high-profile steps to enforce a “minimum advertised pricing” strategy on its sheepskin boots, to the extent that it cut off shipments to shoe store The Walking Company in punishment for the latter selling UGGs at a discount last year. Deckers has furthermore resumed selling UGGs at full price on, as opposed to discounting its shoes there last year. Similarly, Merrill notes that “Columbia appeared less promotional” this year than last, and has “gained modest floor space” at its retail distributors, which should translate into higher sales on its higher priced apparel — resulting in fatter profits. Merrill now sees Deckers earning $0.30 more per share in fiscal 2019 — $5.25 per share.

What it means to investors
Overall, Merrill says that Deckers and Columbia “stood out” in contrast to Foot Locker and Finish Line “for maintaining a firm grip on pricing” this year. In response, Merrill Lynch is raising its price target on both stocks. Deckers Outdoor stock goes to $84 a share, and the price target on Columbia Sportswear stock rises to $75.

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Shoppers Love Cheap Shoes, but Wall Street Prefers Deckers and Columbia Sportswear.