EXEC: SGB 2026 Look Forward – Active Lifestyle Industry Analysts and Advisors

Analysts and dealmakers on Wall Street, in addition to consultants within the area, see the lively way of life sector persevering with to face headwinds in 2026, significantly the probability that tariffs will power one other spherical of value hikes, additional restraining discretionary spending. However, additionally they see room for optimism.

Demand is anticipated to stay supported by robust curiosity in wholesome existence, sports activities, and out of doors actions, with a possible enhance from the Winter Olympics and World Cup. Lean stock ranges within the market ought to current alternatives for retailers to higher capitalize on tendencies than in recent times. Other potential gross sales drivers embody favorable tax returns, potential tax reform, authorities stimulus, and a possible scale-back in tariffs.

Nonetheless, inflationary pressures will possible proceed and will mount additional with an emphasis on worth and differentiation anticipated to be essential for each distributors and retailers.

This is the primary installment in a collection of articles from SGB Media exploring the business’s outlook for 2026, with future reporting to incorporate the viewpoints of distributors, retailers, element corporations, and commerce organizations within the lively and out of doors way of life area.

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Ike Boruchow
Managing Director, Equity Research Analyst, Retailing, Specialty Softlines, and E-Commerce, at Wells Fargo Securities

“Health of the Consumer: While we proceed to see a winners/losers setup, greater image, we lean extra constructive on the area coming into 2026 on account of 1) better-than-feared early vacation reads, 2) advantages from tax reform (esp 1H26) and three) optionality on tariff repeal/refund. Consumer spending habits in 2025 had been largely knowledgeable by tariffs and promos, usually trending hand-in-hand, creating episodic procuring patterns. Entering 2026, we’re extra optimistic, as tax reform advantages (esp. 1H) stream by to middle-income consumers (comparatively weaker in 2025), which most probably boosts discretionary spend, however not massive sufficient to spend on ‘big ticket.’ That mentioned, the lower-income cohorts possible proceed to wrestle (stimulus-focused elsewhere).

“Talkin’ Tariffs: Interestingly, the key tariff theme entering 2026 is repeal/refund. While fluid, early indications could suggest both reversing a majority of tariffs implemented to date and a refund of tariff revenue collected, which could create a material tailwind to our space (group has absorbed 150 to 200 basis points (bps) of tariff headwind. In a Bull Case, we would see 1) Under Armour (UAA), 2) Carter’s (CRI), 3) Capri Holdings Limited (CPRI), 4) Victoria’s Secret & Co. (VSCO), and 5) Gap Inc. (GAP) as key “tariff reversal” winners, based mostly on the quantity of tariff absorbed relative to working margin (OM) ranges.

“Talkin’ Tariffs, Part 2: Digging deeper into the subject, we highlight work from our macro strategy team, as well as our own bottom-up analysis, showing that our sector would be among the largest beneficiaries should tariffs be reversed, with a potential ~15 percent benefit to EBIT. We have seen a material negative impact from tariffs to date across our space, which could potentially bring back hundreds of bps of margin, not including a refund with >$90B collected to date under IEEPA.”

Eoin Comerford
Principal, Outsize Consulting, Advisors to Outdoor/Active Industry; The Rock Fight Podcast Co-Host & Consigliere

“Outdoor manufacturers’ gross sales will possible get off to a gradual begin in 2026. Retailers have been conservative with preseason orders, positioned in the course of the peak of tariff turmoil final summer season. In addition, many manufacturers are solely now introducing value will increase to offset at the least a few of the tariff impression. These will increase will hit an already strained shopper, resulting in decreased demand for all however the hottest manufacturers and classes. While greenback gross sales could also be near flat, unit gross sales are prone to be down within the excessive single digits.

“Projecting later into the yr is sort of inconceivable given the excessive stage of financial uncertainty created by the ever-changing insurance policies of the present administration on each home and worldwide fronts.

“There are a few reasons for hope. First, we could see a rollback in tariffs, whether due to the Supreme Court or a pullback by the administration in response to flagging poll numbers. Second, outdoor participation rates remain at record highs, and those participants will continue to need the gear and apparel to support their activities. Third, core outdoor industry consumers tend to be older and more affluent, so they have been less impacted by the affordability crisis.”

David Durkin
Co-Owner, Karnan Associates, a consultancy for the run specialty area

“Running into 2026, we’re trying ahead to working with specialty run retailers to proceed to innovate and develop alongside the historic momentum of working as an exercise and sport. We anticipate extra doorways will open and that present retailers will discover new methods to achieve and create runners.

“As manufacturers proceed to innovate their merchandise, we see rising alternatives for the specialty channel to be an avenue of product introduction, training and achievement. To attain the rising variety of runners, we anticipate to see more and more inventive and deep collaborations between manufacturers and retailers. This could embody pop-up or co-branded areas, closely branded and focused advertising activations, and elevated linkages between golf equipment, influencers, manufacturers, occasions, and retailers. With the addition of recent doorways and the impression of distinctive advertising activations, channel gross sales in 2026 ought to extra carefully mirror the general progress of working.

“Building on their high level of service, experience and deep roots in their local communities, specialty running shops will remain at the heart of both the running community and the running industry.”

Sucharita Kodali
VP, Principal Analyst, Forrester, a analysis and advisory agency

“The retail panorama is coming into a interval of profound transformation, the place profitability will not be non-compulsory however as a substitute important for survival. The mixture of persistent excessive rates of interest and technological disruption will create a difficult surroundings throughout all retail sectors — from low-margin classes comparable to grocery to high-margin ones like attire.

“Retailers face a perfect storm: Higher wages, waning consumer confidence and intensifying competition will force merchants to innovate to maintain customer loyalty and market share. Incremental improvements simply won’t cut it — success demands organizational readiness to invest in technology solutions, embrace experimentation and learn from failures. From bankruptcy waves to AI-powered shopping assistants and stricter return policies, the retail industry stands at a crossroads where traditional business models face pressure to lower costs.”

Brian Little
Managing Director, Lincoln International, a Chicago-based mid-market funding banking agency

“The lively and out of doors shopper sector enters the yr forward in a extra normalized, however nonetheless selective, progress surroundings. Consumer curiosity in lively existence stays robust, although discretionary spending is more and more value-driven as households take care of lingering inflation. Brands that clearly articulate efficiency, sturdiness and authenticity proceed to win share, whereas sustainability stays an essential differentiator.

“From an working standpoint, value pressures have moderated however not disappeared. Tariff uncertainty, geopolitical threat and provide chain complexity are pushing manufacturers to diversify sourcing and spend money on tighter stock and demand planning. Those that tailored early at the moment are higher positioned to guard margins and help progress.

“M&A exercise within the center market stays constructive. Strategic patrons and personal fairness are actively pursuing differentiated manufacturers with robust unit economics, repeat buy conduct and clear paths to scale. Valuations stay wholesome for high-quality belongings, although patrons are more and more disciplined and targeted on profitability and money stream over pure top-line progress.

“Overall, the sector is transitioning from recovery to disciplined expansion, creating meaningful opportunities for well-positioned brands and thoughtful acquirers alike.”

Paul Martin
Global Retail Growth Leader, AlixPartners, a monetary advisory and consulting agency

“While the general projected spending development for 2026 is one in all additional contraction, the [Retail and Consumer Products] sector and demographic specifics present that retail manufacturers nonetheless have a lot to go after subsequent yr. Pockets of enlargement are uncommon, although, so success will depend on taking share from opponents reasonably than by a market uplift, which can be one or two years away. Retailers should differentiate — discovering what others lack or can’t credibly ship — and act decisively to seize this spend. The cut up between meals and non-food retail is stark. Grocery demonstrates resilience, whereas extra discretionary classes comparable to style, DIY, and sporting items face declining volumes and margin stress.

“Irrespective of those general trajectories, although, there will likely be alternatives ‘between the lines’ of each sector. Consumers are open to buying and selling down from luxurious or mid-market manufacturers or merchandise, and more and more prioritizing well being and worth—fewer purchases, maybe, however the pursuit of higher high quality. Brand switching is now commonplace, requiring operators to grasp the missions driving these shifts and rapidly reply.

“Premiumization also harnesses this stratification of buying behaviors: while luxury may be under pressure, the premium and value segments that expertly position their products can outperform the embattled middle, as shoppers become more discerning in their choices.”

Peter McGoldrick
VP, Lifestyle Brands, Stifel, Investment Bank

“We anticipate modest progress and stabilizing fundamentals in 2026. The yr incorporates a favorable occasion calendar, with the Winter Olympics and FIFA World Cup driving pleasure and engagement throughout the athletic area. Rising participation in lively existence and shopper desire for merchandise with efficiency attributes present thematic demand help. Marketplace stock ranges seem usually aligned with demand. Despite greater costs, we anticipate customers to interact with manufacturers that supply real innovation and perceived high quality.

“At the macro stage, we anticipate modest U.S. shopper spending progress pushed by wages outpacing inflation and a slight tailwind from favorable tax returns. Internationally, European and APAC spending capability advantages from greater financial savings charges and moderating inflation. While China stays a compelling long-term alternative, near-term sentiment is dampened by wealth-effect headwinds.

“A historic valuation discount for Lifestyle Brands underscores selective opportunity. A full year of U.S. tariffs poses challenges for both consumers and businesses, but these effects appear appropriately reflected in estimates. For stock selection, we favor 1) structurally improving businesses with tangible drivers, including Wolverine Worldwide, Levi Strauss, and Deckers; 2) underappreciated growth models, including On and Birkenstock; and 3) stocks with capacity for sentiment re-rating, including Under Armour and Columbia Sportswear.”

Matt Powell
Senior Advisor, BCE Consulting

“Two economies begin to take a toll. Moody’s states that the Top 10 percent of the income population controls 50 percent of consumption.  Consumption here has been driven by the stock market. If (when) the AI bubble bursts, it will have a massive negative impact on the Top 10 percent. The other 90 percent are struggling. Higher health care premiums will hit this group hard. The 90 percent will be a big drag on the economy. Calling this economy “k-shaped” is cute, nevertheless it masks the actual hazard we face right here.

“Tariffs will proceed to be a difficulty. We are simply now starting to see the true impression of tariffs on pricing. Brands and retailers have used each trick to attempt to maintain costs down, however we’ve just about used all of that up.  Inflation stays a difficulty.

“Affordability/Frugality/Practicality will likely be essential concepts in 2026. Given the above two factors, customers will likely be involved about their private monetary scenario in 2026. Communicating worth (not simply value) will likely be an essential story.

“Foot Locker liquidations will likely be disruptive. As Dick’s ‘cleans out the garage at Foot Locker, we have seen a flood of clearance in the market, forcing other retailers to respond. Then we can expect Dick’s to announce a big quantity of Footlocker retailer closures, which can additional disrupt the market.  It will likely be a really messy yr in sneakers.

“Nike continues to make gradual progress on the turnaround. Nike is doing all the precise issues to show the model round, however lots of the initiatives will take time. I anticipate issues will get progressively higher, however don’t anticipate Nike to return roaring again any time quickly.

“All in, another challenging year for the sneaker game. Those brands and retailers that stay fresh, respond quickly and manage the market can outperform.”

Nate Pund
Global Head of the Active Lifestyle Investment Bank, Houlihan Lokey

“I forecast that the M&A panorama for the Outdoor/Active Lifestyle sector will likely be poised for a big acceleration in 2026 based mostly on the confluence of three key tailwinds: resilient shopper spending, the decision of tariff-related uncertainty, and a mounting crucial for personal fairness funds to generate liquidity.

“The 2025 vacation season, whereas marked by extra deliberate and value-oriented shopper conduct, demonstrated the continued willingness of households to allocate discretionary funds towards trusted manufacturers and experiences. This sustained spending supplies a essential basis of confidence for each strategic acquirers and monetary sponsors evaluating investments within the sector.

“For the previous a number of years, ambiguity surrounding the scope and longevity of tariffs has acted as a big brake on M&A exercise, creating valuation gaps that proved troublesome for patrons and sellers to bridge. While the prospect of sustained tariffs represents an ongoing value layer for a lot of companies and finally customers, the rising readability on commerce coverage removes the paralyzing uncertainty that beforehand hindered deal stream.

“Lastly, and perhaps most significantly, will be the immense pressure on private equity firms to monetize their portfolios and free themselves up for future investments. The private equity industry is currently sitting on a record backlog of unsold companies, a result of extended holding periods caused by higher financing costs and market volatility. This ‘exit bottleneck’ is expected to significantly increase the supply of high-quality companies coming to market in 2026, with sponsor-to-sponsor transactions and strategic sales being the most credible exit routes.”

Walt Shepard
Principal, BCE Consulting

“Overall Industry Growth Outlook: Low Single-Digit, Uneven Growth: The broader out of doors business will proceed to expertise low single-digit progress or stagnation in 2026, with significant divergence between winners and laggards.

“Incremental Apparel Innovation, Limited Consumer Pull: In 2026, most out of doors attire classes will proceed to see incremental innovation that doesn’t materially broaden demand, leading to restricted shopper pull outdoors a small variety of related manufacturers (e.g., Vuori).

“Continued Retail De-Emphasis on Hardgoods in Generalist Channels: The largest retailers – outdoor-focused or not – will proceed to cut back out of doors hardgoods flooring area in favor of attire and footwear.

“Demand & Inventory Planning as a Competitive Advantage: In a low-growth surroundings, stock precision and demand planning execution will more and more separate winners from losers.  Operational excellence turns into a progress lever, not only a cost-control operate.

“Footwear as a Relative Growth Engine, Led by Trail Running: Footwear will outperform attire in 2026, with path working rising as a stronger progress and storytelling driver, drafting on the success of efficiency (street) working.

“Continued Rise of Specialist Brands: Specialist brands with a narrow, technically credible point of view will continue to take share from over-assorted incumbents.”

Matt Tingler
Managing Director, RW Baird’s Global Consumer Investment Banking Group

“Despite market turmoil attributable to geopolitical volatility and tariffs, we had an awesome yr and continued to ship excellent outcomes for our shoppers, together with the sale of golf business disruptor LAB Golf to L Catterton, a premier funding agency targeted on the patron market.

“We are optimistic about 2026 and anticipate deal exercise to meaningfully decide up within the new yr.

“We have a robust backlog of alternatives that continues to construct, and we anticipate patrons, each company and personal fairness, will likely be hungry for acquisitions after a gradual 2025.

“We see a number of elements supporting larger exercise, together with company patrons leveraging robust stability sheets and trying to M&A to speed up progress; non-public fairness using huge quantities of ‘dry powder’; moderating rates of interest, which ought to stimulate capital funding; and government-driven stimulus that ought to activate shopper spending, amongst different drivers.

“Additionally, we see a return of the IPO market for consumer businesses in 2026 that will generate broader investor enthusiasm, thereby stimulating deal activity in both the private and public markets.”

Lead Image courtesy Yahoo