NEW YORK -- Nike's swoosh isn't the only athletic symbol that has been shining lately on Wall Street.
A sudden return of confidence in athletic-footwear companies by Wall Street and surges in business by key firms, such as Beaverton, Ore.,-based Nike Inc. and New York-based Venator Group Inc., have sent a number of athletic-footwear stocks soaring.
Wall Street analysts are talking about signs of a resurgence for many athletic brands and the athletic-footwear industry overall. They are also taking a renewed interest in these companies' stocks.
Nike stock has been rising, and in recent weeks, Stoughton, Mass.,-based Reebok International Ltd., Fort Lauderdale, Fla.,-based The Sports Authority and Peabody, Mass.,-based Saucony Inc. all saw their stocks shoot up with double-digit gains.
Not that it's a completely rosy picture. While athletic footwear may be doing well, athletic apparel remains in a lull. Analysts also said a key reason for the rise was a belief that stocks had fallen in recent months to the point where they were now attractively priced. But with the back-to-school season nearing and the Olympics offering a likely jump in sales, some people are seeing a rosier future.
'It's a turnaround,' said John Shanley, an analyst with First Security Van Kasper, based in San Francisco. '[Retailers] are concentrating on their most productive properties. It's a different way of looking at the industry. You don't have to be in every single mall of America to generate the same amount of revenues.'
Nike, the bellwether for athletic-footwear brands, saw sales dip in its last quarter, but earnings rose and gross margins leapt to 40.5 percent of net sales, from 37.3 percent, indicating a healthier company.
'This is a significant improvement and represents the highest margin in the last three years,' said Jennifer Black, president of Portland, Ore.,-based Black & Co.
Analysts said consumers were paying more per pair, a key sign of interest in athletic footwear. 'The highest-end price points are selling very well,' said Robert Drbul, an analyst with New York-based Lehman Brothers Inc. 'That demonstrates the demand for the products.'
Total spending last year was flat at $13.742 billion. The number of pairs slipped 3.8 percent to 313.093 million, from 325.419 million, but prices per pair rose 3.5 percent to $43.89 from $42.42, according to North Palm Beach, Fla.,-based Sporting Goods Manufacturing Association.
Women may be making a bigger move to and impact on sales, according to analysts and the SGMA. 'There has been a strong move to quality and performance in women's athletic footwear,' said SGMA Vice President Gregg Hartley, adding women were paying more for athletic shoes than they did a year ago. 'It's tied to increased sports participation and interest in sports [by women].'
Part of what's happening, analysts suggested, is a fashion shift among younger consumers toward athletic footwear brands. A strong economy may be helping, as young customers spend on cachet rather than seek the best deal.
'There's actually a shortage of top-end product in the market,' Shanley noted. 'Kids [are again] thinking of athletic footwear as part of a fashion statement.'
Over the past year, athletic-footwear store closings have eliminated about 12 percent of athletic-footwear retail square footage. With the massive closings over, analysts are now looking at a more stable industry.
'The sentiment on the sector has changed,' said Drbul. 'Now that retail sales are showing improvement, investors are coming back.'
'The U.S. athletic market, particularly for athletic-footwear products, has experienced a positive turnaround in consumer demand,' Shanley said. He added that due to the shakeout, retailers are facing less competition.
Drbul and Shanley noted that as stores perform better, the brands will benefit. Mahwah, N.J.,-based Footstar Inc., which acquired about 80 of Just For Feet's stores, is now ordering fresh merchandise for those units. Other retailers are deciding to build narrow but deep merchandise mixes.
Reebok International Ltd., Stoughton, Mass., saw its stock shoot up about 50 percent in a week, in part as retailers focus on Reebok and other key brands. Some brands are taking retail merchandising into their own hands. Nike is selling different product to different stores, preventing all stores from showing the same products.