Zacks Industry Outlook adidas, Steven, Wolverine, Carter's and Caleres

For Immediate Release

Chicago, IL – August 20, 2026 – Today, Zacks Equity adidas AG ADDYY, Steven Madden, Ltd. SHOO, Wolverine World Wide, Inc. WWW, Carter’s, Inc. CRI and Caleres, Inc. CAL

Industry: Shoes & Retail Apparel

Link: https://www.zacks.com/commentary/2976722/5-shoes-retail-apparel-stocks-to-watch-as-demand-innovation-accelerate

The Shoes and Retail Apparel industry is benefiting from strong momentum in premiumization, performance innovation and digital expansion. Growing consumer preference for functional, comfortable and durable products, supported by rising health awareness and active lifestyles, is fueling the demand for technical footwear, athleisure and versatile apparel. Advances in materials, cushioning, sustainability and customization are also strengthening brand differentiation and pricing power. 

Expanding direct-to-consumer and digital channels are enhancing customer engagement, pricing control and inventory efficiency. Investments in e-commerce, data analytics, loyalty programs, faster fulfillment and supply-chain optimization are further supporting operational agility, customer retention and sustainable long-term growth.

However, the industry faces persistent margin pressure from elevated promotions, excess inventory, cautious consumer spending and competitive discounting, which constrain pricing power. Higher raw-material, labor, freight and sourcing costs further weigh on profitability. Despite improved supply chains, inflation-sensitive demand and structural cost pressures make disciplined inventory, pricing and cost management essential.

Looking ahead, sustainable growth will depend on innovation, digital capabilities, supply-chain agility and deeper consumer engagement. Established players such as adidas AG, Steven Madden, Ltd., Wolverine World Wide, Inc., Carter’s, Inc. and Caleres, Inc. appear well-positioned to manage near-term headwinds while pursuing long-term growth opportunities.

About the Industry

The Zacks Shoes and Retail Apparel industry comprises companies engaged in the design, sourcing, marketing and distribution of footwear, apparel and accessories for men, women and children across a diverse portfolio of brands. Their product offerings typically span athletic and casual footwear, fashion apparel, activewear, sports equipment, bags, balls and a broad range of sports and lifestyle accessories. 

Industry participants market their products through multiple channels, including company-operated stores, branded websites and other digital platforms. Many companies also maintain extensive wholesale distribution networks, selling through national retail chains, e-commerce platforms, sporting goods stores, department stores, mass merchandisers, independent retailers and catalogs.

A Look at What's Shaping the Shoes & Retail Apparel Industry

Premiumization & Performance Innovation:The Shoes and Retail Apparel industry continues to benefit from a structural shift toward premium, performance-oriented products. Consumers are increasingly prioritizing functionality, comfort and durability across categories, ranging from running footwear and athleisure to everyday apparel. Advances in cushioning systems, technical materials, sustainable fabrics and product customization are enabling brands to justify higher price points while strengthening customer loyalty and brand equity. 

Rising health awareness, greater participation in fitness activities and the growing adoption of active lifestyles are fueling the demand for technical footwear and versatile apparel that can transition seamlessly from workouts to everyday use. As brands increasingly combine fashion, innovation and performance, premiumization remains an important lever for margin expansion, customer retention and competitive differentiation.

Direct-to-Consumer Expansion & Digital Acceleration: The continued expansion of direct-to-consumer (DTC) channels and digital commerce represents another key growth driver for the Shoes and Retail Apparel industry. Brands are investing in e-commerce platforms, mobile applications, customer data analytics and loyalty ecosystems to deepen consumer relationships while gaining greater control over pricing, merchandising and distribution. 

Personalized marketing, membership programs and integrated omnichannel experiences are helping drive engagement, repeat purchases and higher customer lifetime value, while reducing the dependence on third-party retailers. Concurrently, investments in faster fulfillment, inventory optimization, supply-chain automation and localized sourcing are improving operational agility and responsiveness to rapidly changing consumer trends. As digital penetration increases and brands leverage first-party data more effectively, DTC expansion should support better inventory productivity, stronger brand economics and more sustainable long-term growth.

Margin Pressure From Promotions & Cost Inflation: Industry participants continue to face meaningful pressure on profitability. Elevated promotional activity, excess inventory in certain categories, cautious consumer spending and intense competitive discounting can constrain pricing power and force brands to rely on markdowns to stimulate demand. 

At the same time, persistent cost pressures across raw materials, labor, freight and sourcing continue to weigh on gross margins. Although supply-chain conditions have improved considerably from prior disruptions, structurally higher operating costs, unfavorable product mix and continued promotional intensity may limit the pace of margin recovery. 

Moreover, footwear and apparel remain discretionary categories and are therefore particularly sensitive to inflation, weakening consumer confidence and shifts in household spending priorities. Consequently, revenue growth may not always translate into comparable earnings growth, making disciplined inventory management, cost control and pricing execution increasingly critical to profitability.

Zacks Industry Rank Indicates Bright Prospects

The Zacks Shoes and Retail Apparel Industry is a 10-stock group within the broader Zacks Consumer Discretionary sector. The industry currently carries a Zacks Industry Rank #61, which places it in the top 25% of more than 250 Zacks industries.

The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bright prospects for the near term. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

The industry’s positioning in the top 50% of the Zacks-ranked industries is the result of a positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually gaining confidence in this group’s earnings growth potential.

Before we present a few stocks that you may want to consider for your portfolio, let us look at the industry’s recent stock market performance and valuation picture.

Industry vs. Sector

The Zacks Shoes and Retail Apparel industry has underperformed the sector and the S&P 500 in the past year.

Stocks in the industry have collectively declined 43.4% in the past year. Meanwhile, the Zacks Consumer Discretionary sector has fallen 13.3%, while the Zacks S&P 500 composite has risen 23.4%.

Shoes & Retail Apparel Industry's Valuation

On the basis of forward 12-month price-to-earnings (P/E), commonly used for valuing Consumer Discretionary stocks, the industry is currently trading at 18.53X compared with the S&P 500’s 20.63X and the sector’s 16.42X.

Over the last five years, the industry traded as high as 36.65X and as low as 18.53X, with a median of 25.83X.

5 Shoes & Retail Apparel Stocks to Watch

Carter’s: This is the leading marketer of branded apparel and products for babies and young children in North America. The company has taken significant steps in pricing to adapt to market conditions and boost profitability. Its emphasis on essential core products and strong value offerings, particularly in inflationary markets, appeals to budget-conscious shoppers. Carter’s has also seen a notable increase in margin rates due to reduced inbound freight costs, which is a key factor in margin growth. This reflects the company's focus on efficient cost management and operational improvements.

The Zacks Consensus Estimate for CRI’s 2026 earnings indicates a decline of 10.1% from the year-ago quarter’s reported figure. The consensus estimate for CRI’s 2026 EPS has moved up 1% in the past 30 days. The company has a trailing four-quarter earnings surprise of 415.9%, on average. Shares of this Zacks Rank #2 (Buy) company have rallied 47.6% in the past year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Wolverine: The company is engaged in designing, manufacturing and distributing a wide variety of casual and active apparel and footwear. It also manufactures children’s footwear and specially designed boots and accessories for industrial purposes. Wolverine’s focus on brand structure, increasing efficiency by removing costs, strategic review of its portfolio, improving working capital and lowering leverage bode well. The company continues to focus on strengthening its DTC business. Speed-to-market initiatives, deployment of digital product development tools, expansion of e-commerce platforms and frequent product introductions are steadily contributing to Wolverine’s performance.

The Zacks Consensus Estimate for WWW’s 2026 sales and earnings suggests growth of 6.5% and 20.9%, respectively, from the year-ago quarter’s reported figures. The consensus estimate for WWW’s 2026 EPS has moved up 3.8% in the past seven days. The company has a trailing four-quarter earnings surprise of 7.6%, on average. Shares of this Zacks Rank #2 company have declined 30.1% in the past year.

adidas: This leading manufacturer and seller of athletic and sports lifestyle products in Europe, the Middle East, Africa, North America, Greater China, the Asia Pacific and Latin America is poised to gain from strong demand, compelling products and the robust performance of its online business. ADDYY has been benefiting from improved sell-through of all Adidas products in the market. The company has been witnessing improved margins, driven by the recently implemented price increases and an improved channel mix.

The Zacks Consensus Estimate for ADDYY’s 2026 sales and earnings indicates growth of 10.8% and 26.8%, respectively, from the year-ago quarter’s reported figures. The consensus estimate for ADDYY’s 2026 EPS has moved up 2.4% in the past 30 days. adidas delivered a negative earnings surprise of 4.2%, on average, in the trailing four quarters. This Zacks Rank #3 (Hold) stock has declined 10% in the past year.

Steven Madden:This Long Island City, NY-based company is well-positioned to deliver durable upside, driven by a strategic shift toward higher-margin direct-to-consumer channels, wherein accelerating online and owned-store growth enhances pricing power and customer economics. The company’s acquisition of a complementary international DTC platform meaningfully expands scale, improves geographic mix and unlocks revenue and margin synergies through distribution and marketing integration.

Steve Madden continues to deepen consumer engagement and cultural relevance, particularly among Gen Z and millennials, key demographics for growth. SHOO has a trailing four-quarter earnings surprise of 10.6%, on average. The Zacks Consensus Estimate for the company’s 2026 sales and earnings indicates growth of 12.8% and 25.9%, respectively, from the year-ago quarter’s reported figures. The consensus estimate for SHOO’s 2026 EPS has increased 2.4% in the past 30 days. Shares of this Zacks Rank #3 company have rallied 75.7% in the past year. 

Caleres: This Saint Louis, MO-based company designs, develops, sources, manufactures and distributes footwear in the United States, Canada, East Asia and internationally. Caleres offers a steadily improving investment case, supported by strong momentum in its brand portfolio, wherein lead brands continue to gain share and deliver healthy growth. The recent addition of Stuart Weitzman expands its premium positioning, with integration efforts expected to unlock meaningful cost synergies over time. The company is also seeing improving trends at Famous Footwear and strong e-commerce traction, signaling stabilizing consumer demand.

Caleres is prioritizing cost discipline, inventory management and structural efficiencies. These actions position the company for more durable margins and a stronger long-term financial profile. CAL has a trailing four-quarter earnings surprise of 11.4%, on average. The Zacks Consensus Estimate for the company’s fiscal 2026 sales and earnings indicates growth of 4.1% and 37%, respectively, from the year-ago quarter’s reported figures. The consensus estimate for CAL’s fiscal 2026 EPS has been unchanged in the past 30 days. Shares of this Zacks Rank #3 company have declined 11.9% in the past year. 

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