Overall, 2024 was a year of underperformance when it comes to retail stocks. The SPDR S&P Retail ETF NYSEARCA: XRT finished the year with a total return of just under 12%. That is approximately half the return generated by the S&P 500 Index. However, there were several standouts in the industry, particularly among three stocks based in Europe. Two of them returned over 100% on the year, while another outperformed the industry ETF by over 4%. Below, I’ll break down these names and give my take on why they can keep rising in 2025.
On Holdings: Taking Big Steps in the Footwear Market
On NYSE: ONON, the Swiss athletic footwear maker had a fantastic 2024. The company’s value more than doubled, with shares returning 103%. Sales growth has been strong and accelerating. Revenues grew by over 20% each quarter and reached north of 30% in Q3. Margins also increased slightly to their highest quarterly level in Q3, up 60 basis points from the prior year period.
ON Stock Forecast Today
12-Month Stock Price Forecast:$56.770.27% UpsideModerate BuyBased on 24 Analyst Ratings | High Forecast | $66.00 |
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| Average Forecast | $56.77 |
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| Low Forecast | $34.00 |
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ON Stock Forecast DetailsOne of the large tailwinds for On over the past few years was the struggles of Nike NYSE: NKE. As Nike worked to push its direct-to-consumer (DTC) channel to increase margins, it made a significant error in its thinking. Retail stores like Foot Locker NYSE: FL receive less Nike inventory due to Nike’s DTC effort, so they need different products to fill their shelves.
That’s where companies like On came in, filling the holes in footwear retailer inventory. This provided strong brand exposure. Additionally, On introduced innovative new products, while Nike fell behind on that front. Nike is now going through a corporate shake-up with a new CEO. This gives On the ability to continue advancing in 2025. Analysts are lowering their earnings forecasts on Nike as it looks to normalize its inventory levels and put sports back at the center of its product line. This gives On the opportunity to continue taking market share as Nike repositions. Additionally, On is working to expand further into apparel, which accounts for just 4% of revenue. This is another large market the company can potentially tap into.
Amer Sports: Ready to Move Forward After Paying Down Debt
Amer Sports NYSE: AS is a Finnish sportswear company that has also achieved accelerating growth in 2024. Revenue grew by 13% in Q1 and increased by 17% in Q3. The company’s technical apparel segment, led by its luxury Arc’teryx brand, grew by 34% last quarter.
Amer Sports Stock Forecast Today
12-Month Stock Price Forecast:$25.14-14.74% DownsideModerate BuyBased on 16 Analyst Ratings | High Forecast | $37.00 |
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| Average Forecast | $25.14 |
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| Low Forecast | $16.00 |
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Amer Sports Stock Forecast DetailsIt also increased its adjusted operating margin by 280 basis points in Q3, blowing past its previously set guidance. Growth in Asia has also been exceptional. Revenues in China increased 56% and Asia Pacific revenues grew by 47%. Not including the first-day change since its initial public offering in March, the company’s shares have rocketed up by 108%.
One of the biggest eyesores around Amer Sports was its massive $2.8 billion in debt. It recently went a long way in mending this issue through another public offering of stock. It raised $1.1 billion to repay loans. S&P Global Ratings subsequently raised its credit rating on Amer to BBB, moving its rating into the investment-grade category. With this problem lessened, the company can focus more on its push into China.
The high-end Arc’teryx brand has been one of the key sales growth drivers in China. The premium pricing may align well with the socio-economic demographics in China, which suffers from significant income inequality. Rich consumers can remain more resilient and continue demanding these products even as macroeconomic conditions fluctuate.
Birkenstock: Capital Investments May Be Set to Pay Off in 2025
Birkenstock NYSE: BIRK shares had an up-and-down year in 2024, finishing with a total return of 16%. This underperformed the broad market; however, it outperformed its overall industry significantly.
Birkenstock Stock Forecast Today
12-Month Stock Price Forecast:$68.3121.36% UpsideModerate BuyBased on 17 Analyst Ratings | High Forecast | $95.00 |
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| Average Forecast | $68.31 |
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| Low Forecast | $58.00 |
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Birkenstock Stock Forecast DetailsThe German sandal maker saw revenue growth near or above 20% every quarter in 2024. Key profitability and growth drivers can potentially help Birkenstock shares ride higher in 2025.
The company invested significantly to increase its production capacity. This hurt the company’s gross margin in 2024. However, it sets it up to expand sales and to further capitalize on strong demand in Asia. Revenue from Asia grew 42% last quarter. Additionally, the company’s strong growth in its DTC channel can help push margin expansion in 2025. The average of six Wall Street price targets released since the company’s latest earnings report implies upside in the shares of 33%.
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