“2024 Recap: The Rollercoaster Ride of Active Lifestyle Stocks”

The vast majority of stocks traded in the active lifestyle sector in 2024 lagged behind substantial broader market advances, with the S&P 500 soaring over 20 percent for the second consecutive year. For the third straight year,  stocks within the active lifestyle sector faced challenges due to inflation concerns, sluggish consumer spending, and major public companies like Nike, Lululemon, Columbia Sportswear as well as Topgolf Callaway Brands, all experienced lost sales momentum.

The S&P 500 spiked 23.3 percent in 2024, fueled by optimism regarding rate reductions, economic strength and enthusiasm over artificial intelligence (AI), resulting in significant profits for various tech stocks, spearheaded by Nvidia, Tesla and Meta Platforms. Building on the achievements of 2023, the two-year total gain for the S&P 500 reached 53 percent, the highest since the nearly 66 percent increase in 1997 and 1998.

In other broader benchmarks, the Dow climbed 12.9 percent in 2024, while the Nasdaq outshone with a rise of 28.6 percent.

In contrast, among 83 stocks in the active lifestyle sector monitored by SGB Executive, merely 19, or 23 percent, surpassed the 23.3 percent growth of the S&P 500, while 48 stocks, comprising 58 percent of the active lifestyle stocks tracked, decreased in value.

Active lifestyle stocks also underperformed the broader indices in 2022 and 2023 following exceptional growth in 2021 and 2020. The industry initially capitalized on increased interest in outdoor and fitness pursuits during the early stages of the pandemic, yet participation levels in numerous activities largely reverted to pre-pandemic figures – especially at the essential level.

Aside from inflationary pressures affecting discretionary spending in 2024, pandemic-induced supply chain disruptions resulted in excessive inventories, particularly in the outdoor sector, necessitating significant discounts to eliminate accumulated stock levels over the last two years.

Among the achievers, Wolverine World Wide (WWW) secured the leading growth position among active lifestyle entities, surging almost 150 percent in 2024 to finish the year at $22.20 per share. The company, which owns Merrell and Saucony, has recently upgraded its full-year forecast as management shifted its strategy to regain growth.

Adidas (ADS.F) emerged as the second-largest performer in 2024, with company shares increasing by 133 percent year-over-year. Results surpassed expectations owing to robust demand for the brand’s retro-style Gazelle and Samba sneakers and a final resolution of the Kanye West and Yeezy controversies.

Deckers Brands (DECK), which owns Ugg, Hoka, and Teva, executed a six-for-one stock split in September 2024 and recorded an 80.4 percent gain for the year as ongoing successes from Hoka propelled earnings well beyond analyst predictions. The stock has skyrocketed more than seven-fold in the past five years.

On Holdings (ONON), which recently elevated its full-year 2024 net sales growth forecast to at least 32 percent on a constant-currency basis, leaped 103 percent to conclude 2024 at $54.77 per share. The share price has more than doubled since its debut at $24 a share in August 2022.

VF Corp. (VFC), the owner of The North Face, Vans, Timberland, and Dickies, made a modest recovery during the year, gaining 14.1 percent to finish at $21.46 per share, aided by some advancements under a restructuring initiative led by CEO Bracken Darrell. The stock remains significantly below its all-time peak of $100.25 per share achieved in January 2020.

Among retailers, Dick’s Sporting Goods (DKS), which boosted its annual estimates after each quarterly report last year, garnered a 55.7 percent increase in share price in 2024. The company’s shares have surged 460 percent over the past five years.

Boot Barn (BOOT), which has capitalized on the cowboy boot trend, more than doubled its share price to $54.77 per share from $26.97 per share at the conclusion of 2023.

Urban Outfitters, Burlington Stores, Amazon, Costco, eBay, and Nordstrom all achieved gains exceeding 30 percent.

Conversely, among the underperformers, Nike (NKE) shares peaked at $90.62 following news in September about the company’s reappointment of Nike veteran Elliot Hill as CEO, but subsequently retreated to close the year at $75.67 per share, down 30.3 percent year-over-year. Nike warned that a return to growth would require more time than some anticipated. Nike stock reached an all-time high of $179.10 in November 2021.

Foot Locker (FL), Nike’s primary customer, fell by 30.1 percent to $21.76 per share at year-end.

Lululemon’s LULU stocks retracted 25.2 percent to $382.41 in 2024 due to concerns regarding slowed growth in North America and issues with its Breezethrough product line. Shares remain up 65 percent over the last five years.

Academy Sports & Outdoors (ASO) faced its first annual share price drop since going public in October 2020, with a loss of 12.8 percent, as the retailer had to reduce its forecasts for the year due to weaker spending by frugal consumers.

Topgolf Callaway Brands (MODG) shares plummeted 45.2 percent for the year to $7.86 a share amid poor sales at its Topgolf segment, prompting the company to propose a spin-off of the Topgolf entertainment division.

High inventories in various active outdoor categories and cautious ordering approaches by retailers resulted in lower-than-expected sales for many vendors in the outdoor sector. Sturm, Ruger & Co. (RGR), Smith & Wesson (SWBI) and Yeti (YETI) experienced share declines exceeding 20 percent, while shares fell by over 30 percent for Black Diamond parent Clarus Corp. (CLAR) and Johnson Outdoors.

Shares of Fox Factory Holding Corp. (FOXF), which confronted substantial markdowns to liquidate stock in the IBD sector, decreased 55.1 percent for the year.

Allbirds (BIRD), which executed a 1-for-20 reverse stock split in September, concluded at $6.97, down 53.5 percent for 2024. Adjusted for the split, the once direct-to-consumer sensation debuted in November 2021 at a listing price of $300.

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Image credited to On Running