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Pandemic led to ‘running renaissance’ that could last a decade, Brooks Running CEO says

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Brooks Running CEO Jim Weber joins Yahoo Finance Live to discuss secular growth for the company, earnings amid growing U.S. running shoe market, and top sneaker trends.

Video Transcript

JULIE HYMAN: Well, Brooks Running, which is owned by Berkshire Hathaway, set a record for revenue in 2021, which had just reported of $1.11 billion. That's an increase of 30% year over year. And we've got Jim Weber with us-- he is Brooks Running CEO-- to talk about the numbers and what feels like sort of a running Renaissance that we have had, at least here in the United States, Jim. Do you think that we are amidst that? And if we are, kind of, where are we in that cycle?

JIM WEBER: Thanks for having me this morning. Yes, we think we are in a running Renaissance. We really see a secular growth in our sport. And running has ebbed and flowed a bit over the decades. It's always there, but boy, did we see people get outside when the pandemic first hit. Walking, hiking, and running made the cut. And so what we've seen in past growth spurts is it's sticky. And people tend to stick with it. So yes, we think we see running growing for the next decade. There are 150 million people that run worldwide around the world today. We think it literally could double in the next 10 years.

BRIAN SOZZI: Jim, help us understand-- we've talked to you in the past, but help us understand why runners are so just fascinated with your shoes. There's a lot of competition out in the market. But one of our producers, I think she has 20 pairs of your shoes. I mean, just enormous.

JIM WEBER: Well, I love to hear that. And we're an overnight success over the last 20 years, I would say, because runners know if a shoe is working for them 20 miles in. Three weeks into the show, they-- shoe, they know, mile after mile, if they would buy it again. And so we've always challenged ourselves to earn that second shoe, that second pair that people buy. And so the experience underfoot, fit, feel, and ride, performance, it's materials, it's biomechanical science.

And dialing in the fit for people shoe by shoe is actually really, really hard. And people are different. We've done clinical research in the labs with hundreds and hundreds of runners with some of the best universities in the world. And here's the outcome-- people are different. Your joint motion is different person to person. So because we're anchored in that, I think people at Mile 20 like the experience our products giving them. And it's not just shoes, it's run bras, head to toe. And that's been the key to our success. It's our focus.

JULIE HYMAN: And so, Jim, how are you guys thinking about innovation these days? We were just showing some of the top ranked shoes, and it's very interesting to me, even with running shoes, how there are trends that sort of come and go, from the minimalist shoes to some more maximalist shoes that are more in vogue now. What are some of the innovations that you're most excited about at Brooks?

JIM WEBER: There's several. And I think what you're hitting on is there are different experiences in running. There are race day experiences and training experiences and comfort and cushioning. So people are experimenting and they're curious, but here's the key. Shoes have never been better. The material science that we're bringing into the cushioning puzzle on just engineered materials that are specific to only running shoes is just a part of what's happening in our category.

And so I think people are seeing that. There's exciting product out there that's giving them new experiences. And mile after mile, we compete really well with all those products in the industry. But the runner has a lot of choices, and it's kind of fun because there's minimalist proprioception, close-to-foot experiences, where you're feeling every stride, maybe on race day or to go fast. And then there's cushioning experiences where you don't want to feel the road or your feet. And we're delivering against all of those.

JULIE HYMAN: And Jim, not only, of course, are you guys always sort of pushing ahead when it comes to the science of running. I have noticed that you've gotten a little snazzier with some of the fashion as well, as we have really seen sneakers come a long way in being a fashion statement. How are you guys thinking about that while still trying to unite it with being a good running shoe?

JIM WEBER: You know, I think the word "fashion" isn't often mentioned in our hallways here at Brooks. But we're focused on crafted beauty. Great product ought to be fantastically designed and beautiful. And we think we're building well-designed, beautiful products today. And color matters. You know, I think the truth is, when you're wearing something, even if it's in a marathon, performance might be first, but it's personal expression about who you are.

And we're a running brand, so if you're an active person, we want you to be associated with our brand. So color is a key part of the apparel and footwear world. When I started at Brooks, the Adrenaline came in one color for 18 months. I think it's in a dozen colors today. But that's great. It gives people choice.

BRIAN SOZZI: Jim, of course, Brooks is owned by Warren Buffett's Berkshire Hathaway. And you're about to become a published author. In that book, can you share anything you learned from Buffett in terms of leadership?

JIM WEBER: You know, I'd be glad to because I've learned a lot. I think the number one thing that has resonated so well for Brooks to be a part of Berkshire Hathaway is they believe in building brands in the mind of the customer over the long haul. And we're trying to play the long game here. So I think every time we've hit a wall here and had some margin issues, whether it was supply chain or currency or what have you, we've tried to go to work on those puzzles from a financial planning point of view.

And the feedback from Greg Abel and Warren Buffett has always been focus on your customer. And so what a platform to build a brand in. We just couldn't be more grateful to have the patient capital to really focus on brand building because that's the game we've been in for 20 years. So, big advantage and there are just super smart people all around. And the game we're playing is trying to build a great brand in the mind of runners. And they're just so fully supportive of that.

JULIE HYMAN: Jim, it's great to see you. Be well, run well. Jim Weber, Brooks Running CEO, nice catching up with you after that record year.