CNBC’s Jim Cramer on Thursday selected two shoe stocks that he believes are destined for success: On Holding and Exterior deckswhich owns a number of shoe brands including Hoka, Uggs and Tevas.
“Even when the athletic footwear and apparel business is a nightmare for most in the industry, you can still find big winning brands, like those owned by On Holding and Deckers Outdoor,” Craner said. “I bet they keep winning.”
Cramer pointed out that it hasn’t been easy lately for some of the big names in the sportswear industry. Actions of Nike And Lululemon have seen sharp declines since the start of 2024. Cramer attributed the losses in part to fears of cash-strapped consumers, but also to strong competition from smaller, fast-growing sneaker and athleisure brands.
But Deckers and On are two promising growth stocks, Cramer said. A strong quarter was reported on Tuesday that sent shares higher, and the stock has been able to build on those gains thus far. He was particularly impressed by the growth of On’s direct-to-consumer channel, which includes online and in-store retail sales.
With Deckers yet to release a report, Cramer said he would advise against buying ahead of earnings. However, he said he expects strong results from the company due to the growing popularity of Hoka, its line of running shoes. The company has seen its shares rise more than 500% over the past five years, according to FactSet. Like On, Deckers’ direct-to-consumer business grew and the company began to experience success in international markets such as Europe and China.
For Cramer, the only problem with these stocks is that they are expensive.
“But you know what? You have to pay for outsized growth, and these companies can do it,” he said. “More importantly, this market values growth again, which means its stocks can work.”
On Holding and Deckers Outdoor did not immediately respond to requests for comment.
cnbc
