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3 Sportswear Stocks to Tap on Return of Live Sports to 'Old Normal'

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Vidya Nair
·5 min read
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The world of live sports was gravely impacted in 2020, thanks to the coronavirus pandemic. Several games were cancelled or rescheduled that disheartened millions of fans. The outbreak eclipsed revenues for major sporting clubs, organizers, governing bodies, associated sponsors and most importantly, athletes. Nevertheless, the later part of the year provided some respite with some of leagues getting clearance, but with empty stadiums. Fans, currently, have to stay content with watching most games on television or live streaming the same.

Sports events with empty stadiums not only point toward loss of revenues from ticket sales, but also lower sale of sports gear, apparel and souvenirs. This is a headwind for several sports-related stocks, including sportswear companies. Nevertheless, every cloud has a silver lining. We expect live sporting events to make a strong comeback in 2021, with stadiums packed full. This is even more likely as vaccinations pick up pace, which will eventually subside the impacts of the pandemic.

The return of organized sports events to the old normal is sure to add gleam to some of the major sportswear stocks. These events present the opportunity for sportswear companies to sell their special edition sports gears and apparel items. Also, this is expected to generate better returns from sponsorships, owing to higher audience exposure. Sportswear companies have been making use of the energy and enthusiasm associated with sports to market their merchandise. Athlete-based promotions before mega tournaments and special promotional ventures on select categories through contests and coupons are frequently adopted by the industry players before and during events. Industry experts opine that resumption of sporting events will increase sports content consumption across broadcasting platforms.

Sportswear companies are also adapting themselves with the new trends emerging in the sports industry, such as live streaming of games through augmented reality. The companies are coming up with effective ways to stay visible and connect with the audience as sports streaming undergoes rapid digitization.

The return of live-sports sparks growth prospects for the sportswear industry. Investors may, therefore, consider keeping a close watch on some of stocks from this space that are poised to grow on their solid brand recognition and sturdy offerings.

Price Performance


3 Sportswear Stocks to Keep an Eye on

Renowned sportswear company NIKE, Inc. NKE is on top of our list. The company, which operates globally, designs and markets a range of athletic footwear, apparel, equipment and accessories for men, women and kids. The company’s logo is well recognized, while its association with celebrity sportspersons ensures a strong brand recall. Markedly, the company is gaining from the popularity of its brand line-ups such as Nike Pro, Nike Golf, Nike+ and Jordan. Moreover, this Zacks Rank #3 (Hold) company is gaining from growth in digital sales across platforms including its online site as well as commercial and activity apps. Even as stores reopen, the company continues to witness strong digital trends. This indicates the strength of its brands and investments made to improve consumers’ digital shopping experiences. NIKE’s shares have increased 21.1% in the past three months. The Zacks Consensus Estimate for fiscal 2021 sales and earnings indicates a rise of 12.7% and 78.1%, respectively, from the year-ago period’s levels. You can see the complete list of today’s Zacks #1 Rank  (Strong Buy) stocks here.

Under Armour, Inc. UAA is another potential pick. Headquartered in Baltimore, MD, the company is one of the leading designers, marketers, and distributors of athletic footwear, apparel, and accessories for a wide variety of sports as well as fitness activities in the United States and internationally. The company is focusing on strengthening brands through innovations. In this context, the company is investing toward boosting women’s sportswear offerings. It is also striving to augment direct-to-consumer and digital business channels. Apart from these, the company’s efforts to strengthen supply-chain operations, manage inventory and curtail costs places it well for long-term growth. Markedly, this Zacks Rank #3 company’s shares have gained 62.5% in the past three months. The Zacks Consensus Estimate for fiscal 2021 sales and earnings indicates a rise of 12.5% and 134.2%, respectively, from the year-ago period’s levels.

Skechers U.S.A., Inc. SKX is renowned for designing, marketing and distributing a wide range of footwear for men, women and kids. The brand is particularly known for its lightweight athletic as well as fusion footwear line-ups for both men and women. In addition to footwear, Skechers also offers other apparel and lifestyle products at attractive prices. This Zacks Rank #3 (Hold) company is making investments toward improving its infrastructure globally, with particular emphasis on boosting e-commerce capabilities and capacity of distribution centers. It is also committed toward product innovations and store-remodeling. Shares of the company have gained 24.5% in the past three months. Notably, the Zacks Consensus Estimate for fiscal 2021 sales and earnings indicates a rise of 22% and 213.8%, respectively, from the year-ago period’s levels.

Zacks Top 10 Stocks for 2021

In addition to the stocks discussed above, would you like to know about our 10 top tickers for the entirety of 2021?

These 10 are painstakingly hand-picked from over 4,000 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Start Your Access to the New Zacks Top 10 Stocks >>

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