Outdoor gear sales are declining, as millennials opt for less expensive, more versatile athletic wear over rugged clothing designed for extreme conditions. The trend remains the same with athletic equipment sales, where versatile products (i.e. mountain bike you can also ride on road) are outselling specialty equipment (i.e. road bikes). The NPD Group reported total outdoor industry sales declined 6% between December ’16 and November ‘17 (to $18.9 billion).
Howie Long-Short: Looking for a positive trend within the outdoor sector? Nearly 1/3 (29%) of all online apparel shoppers bought outdoor gear within the last 12 months, with the average customer spending $178 (+3% YOY). The North Face (VFC, 8% of all buyers), Patagonia (6%) and Columbia (COLM, 3%) are the most popular outdoor retailers within the e-commerce space. Canada Goose (GOOS) and Lands’ End (LE) have also found success online; GOOS consumers increased their spend per purchase 14% YOY, while LE buyers increased their average annual spend 10%. Here’s some more good news for outdoor enthusiasts, Camping World (CWH) is re-opening 69 Gander Outdoors stores. CWH acquired Gander Mountain Company & Overton’s in a May ’17 bankruptcy auction.
Fan Marino: One exception to the trend has been snow industry sales (skis, snowboards, boots, bindings), up 7.8% YOY (to $2 billion) over the first four months of the ski-season. Relatively surprising, considering the historically low snowfall totals across the western U.S.
Want more JohnWallStreet? To join our free daily email newsletter list, sign-up here!
Monster Energy Co. (MNST) is signed on as NASCAR’s title sponsor for the 2018 Cup Series, the 2nd year of a 2-year $40 million contract signed in December ’16, but the company has yet to announce its intentions for 2019. MNST must decide within the next 30 days if it intends on extending the partnership through the 2020 season. On the surface, it appears that MNST is getting strong value. Sprint paid $50 million/season for title sponsorship rights between 2014 and 2016; but television ratings (down 45% since ’05) and race attendance (admission revenue down 52.7% over last 9 seasons) prevent MNST’s decision from being an easy one.
Howie Long-Short: NASCAR attendance may be down, but RV sales are booming! Thor Industries, the owner of Airstream and Jayco (THO), just reported its all-time best quarter (up 30.6% to $2.2 billion in revenue). Company shares are up 55% YTD, with competitors Winnebago (WGO) and Camping World (CWH) also experiencing strong growth this year (72% and 43%, respectively). An influx of first-time buyers (34% in ’16), a wealth of retiring baby boomers (10,000/day) and record high consumer sentiment levels (a key with large discretionary items), are driving the growth.
Fan Marino: NASCAR held its 2017 Cup Awards ceremony celebrating champion Martin Truex Jr. and providing a farewell to Dale Earnhardt Jr. (winner of NMPA Most Popular Driver award and the Bill France Award of Excellence award), but it was CEO Bill France’s odd behavior that had social media stirring. The NASCAR CEO awarded Truex Jr. his championship ring, leaving the stage without shaking the champion’s hand; he also had a notably brief introduction prepared for Earnhardt Jr., winner of the award in his late father’s name. You can watch the video here. Strange stuff.
A Monster Of A Suspenseful Month Could Be Looming For NASCAR
For the balance of today’s newsletter, sign-up here!
Camping World Holdings (CWH) and MLB have announced a multi-year partnership that will make CWH the official sponsor of the League Championship Series’, beginning with the 2017 post season. The mutually beneficial partnership will provide CWH the ability to expand brand awareness through a variety of broadcast, digital, social, mobile and in-park platforms; while offering MLB access to outdoor enthusiasts and new outlets to sell MLB gear. The partnership also makes CWH the presenting partner of Spring Training, will provide exposure for CWH subsidiaries Gander Outdoors, Good Sam, Overton’s, The House & Windward/W82 and gives CWH brands permission to produce MLB licensed items in a variety of consumer product categories. Financial terms of the deal were not released.
Fan Marino: Camping World CEO Marcus Lemonis, a fanatical Cubs fan, is also the star of CNBC’s show “The Profit”. On the show, Lemonis offers struggling small business owners, investment capital and expertise, in exchange for ownership stake. Lemonis earned some good will last fall when he donated 2 of his 4 Field box tickets for Game 3 of the World Series, so a 97 year-old-fan and his son could attend the game.
Howie Long-Short: Camping World Holdings recently reported “record” Q2 ’17 earnings, with net income up 26.3% to $105 million and net income margin up 40 basis points to 8.2%. The company increased revenues 20.7% to $1.3 billion YOY, as it continues to expand its product offerings beyond RVs. This is what Lemonis does. He turns companies around.
MLB, Camping World announce multi-year partnership