Overall, 2024 was a year of poor performance for retail stocks. SPDR S&P Retail ETF NYSEARCA:XRT ended the year with a total return of just under 12%. That’s about half the return of the S&P 500. Still, there were some standouts in the industry, especially among the three companies based in Europe. Two of them returned more than 100% for the year, and the other outperformed the industry ETF by more than 4%. Below, I’ll break down these names and give my opinion on why their growth could continue to rise in 2025.
About holdings: big steps in the footwear market
On New York Stock Exchange: HonorThe Swiss sports shoe maker had a fantastic 2024. The company’s value more than doubled, and the stock return was 103%. Sales growth was strong and accelerating. Revenue grew more than 20% each quarter and reached more than 30% in the third quarter. Margins also rose slightly to their highest quarterly level in the third quarter, up 60 basis points from the prior year.
ON stock forecast today
$56.77
Growth potential 2.53%Moderate purchase
Based on ratings from 24 analysts
| High forecast | $66.00 |
|---|---|
| Average forecast | $56.77 |
| Low forecast | $34.00 |
ON stock forecast details
One of On’s major tailwinds over the past few years has been its battle with Nike. New York Stock Exchange:. While working to promote its direct-to-consumer (DTC) channel to increase profits, Nike made a significant mistake in its thinking. Retail stores such as Foot Locker New York Stock Exchange: Florida are getting less Nike inventory thanks to Nike DTC efforts, so they need various products to fill your shelves.
This is where companies like On come in, filling the inventory gaps at shoe retailers. This created strong brand recognition. In addition, On introduced new innovative products while Nike lagged behind in this regard. Nike is currently undergoing a corporate shake-up with a new CEO. This gives On the opportunity to continue its development into 2025. Analysts are cutting their earnings forecasts for Nike as the company seeks to normalize its inventory levels and return sports to the center of its product line. This gives On the opportunity to continue to capture market share as Nike repositions itself. On is also working to further expand its apparel business, which accounts for just 4% of revenue. This is another major market that the company could potentially enter.
Amer Sports: ready to move forward after paying off debt
Amer Sports New York Stock Exchange: HOW is a Finnish sportswear company that also achieved accelerated growth in 2024. Revenue grew 13% in the first quarter and 17% in the third quarter. The company’s technical apparel segment, led by luxury brand Arc’teryx, grew 34% last quarter.
Amer Sports stock forecast for today
$25.14
-12.85% DisadvantageModerate purchase
Based on ratings from 16 analysts
| High forecast | $37.00 |
|---|---|
| Average forecast | $25.14 |
| Low forecast | US$16.00 |
Amer Sports stock forecast details
The company also increased adjusted operating margin by 280 basis points in the third quarter, exceeding previously established guidance. Economic growth in Asia has also been exceptional. Revenues in China increased by 56%, and revenues in the Asia-Pacific region grew by 47%. Excluding changes on the first day since its initial public offering in March, the company’s shares soared 108%.
One of the biggest eyesores around Amer Sports was its massive $2.8 billion debt. The company recently made a major contribution to solving this problem through another public offering. $1.1 billion was raised to repay loans. S&P Global Ratings subsequently upgraded Amer’s credit rating to BBB, moving it to investment grade. Once this problem subsides, the company will be able to focus more on its expansion into China.
The upscale Arc’teryx brand has become one of the key drivers of sales growth in China. Premium prices may fit well with the socioeconomic demographics of China, which suffers from significant income inequality. Affluent consumers can remain more resilient and continue to demand these products even as macroeconomic conditions fluctuate.
Birkenstock: Capital investments could pay off in 2025
Birkenstock New York Stock Exchange: BIRK The stock experienced ups and downs in 2024, ending with a total return of 16%. It lagged the broader market; however, it significantly outperformed the industry as a whole.
Birkenstock stock forecast today
$68.31
Growth potential 19.24%Moderate purchase
Based on ratings from 17 analysts
| High forecast | $95.00 |
|---|---|
| Average forecast | $68.31 |
| Low forecast | $58.00 |
Birkenstock stock forecast details
In 2024, the German sandal maker’s revenue grew at or above 20% every quarter. Key drivers of profitability and growth could potentially help Birkenstock shares move higher in 2025.
The company has invested heavily in increasing production capacity. This hurt the company’s gross margins in 2024. However, this gives it the opportunity to expand sales and further benefit from strong demand in Asia. Revenue from Asia grew 42% last quarter. Additionally, the company’s strong growth in the DTC channel could support margin expansion in 2025. The average of six Wall Street price targets issued since the company’s last earnings report suggests a 33% upside potential for the stock.
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