5 Best Sporting Goods Stocks To Buy Now

In this article, we discuss 5 best sporting goods stocks to buy. If you want to read our detailed discussion on the sporting goods industry, head over to 11 Best Sporting Goods Stocks To Buy Now. 

5. Skechers U.S.A., Inc. (NYSE:SKX)

Number of Hedge Fund Holders: 40

Skechers U.S.A., Inc. (NYSE:SKX) is a global footwear company that specializes in designing, developing, marketing, and distributing a wide range of footwear for men, women, and children. Their products include casual, casual athletic, sport athletic, trail, sandals, boots, and retro fashion footwear. Skechers U.S.A., Inc. (NYSE:SKX) is one of the top sporting goods stocks to invest in. 

On April 27, Skechers U.S.A., Inc. (NYSE:SKX) reported a Q1 GAAP EPS of $1.02 and a revenue of $2 billion, exceeding Wall Street estimates by $0.41 and $130 million, respectively. The company is optimistic about its performance in fiscal year 2023, expecting sales to range from $7.9 billion to $8.1 billion, an increase from the previous guidance of $7.75 billion to $8 billion. The consensus revenue estimate is $8 billion. Similarly, Skechers U.S.A., Inc. (NYSE:SKX) projects its diluted earnings per share for fiscal year 2023 to fall between $3.00 and $3.20, which is higher than the earlier guidance of $2.80 to $3.00. The consensus EPS estimate stands at $2.99.

According to Insider Monkey’s first quarter database, 40 hedge funds were bullish on Skechers U.S.A., Inc. (NYSE:SKX), compared to 36 funds in the earlier quarter. Richard S. Pzena’s Pzena Investment Management is the largest stakeholder of the company, with approximately 6.2 million shares worth $294.4 million. 

Meridian Growth Fund made the following comment about Skechers U.S.A., Inc. (NYSE:SKX) in its Q4 2022 investor letter:

“Skechers U.S.A., Inc. (NYSE:SKX), designs and sells lifestyle and athletic footwear. It is the third-largest footwear company in the U.S. and has a strong and growing international presence. In our view, the market does not fully recognize the growth opportunity represented by Skechers’ international business. During the quarter, the company reported strong gains worldwide, led by a 48% increase in sales in the EMEA region and a 9% rise in the APAC region despite COVID-related slowdowns, as well as 16% growth in the Americas, powered by healthy demand in the U.S. and Canada. The company is still contending with some expense issues, primarily related to ongoing supply chain and distribution channel challenges, but investors are increasingly recognizing management’s success at managing through the issues and setting the company up for potentially strong cash flow growth in 2023. Amid the growing optimism, we maintained our position in the stock.”

4. Under Armour, Inc. (NYSE:UA)

Number of Hedge Fund Holders: 40

Under Armour, Inc. (NYSE:UA) specializes in developing, marketing, and distributing performance apparel, footwear, and accessories. The company offers a variety of apparel options, including compression, fitted, and loose fit styles. Under Armour, Inc. (NYSE:UA) also provides a diverse range of footwear products designed for activities such as running, training, basketball, cleated sports, recovery, and outdoor use. It is one of the best sporting goods stocks to watch. 

On May 9, Under Armour, Inc. (NYSE:UA) reported the financial results for its fourth quarter and fiscal year ended March 31, 2023. The company posted a Q4 non-GAAP EPS of $0.18 and a revenue of $1.4 billion, outperforming Wall Street estimates by $0.03 and $40 million, respectively. 

According to Insider Monkey’s data, 40 hedge funds were bullish on Under Armour, Inc. (NYSE:UA) at the end of Q1 2023, compared to 37 funds in the earlier quarter. Ken Griffin’s Citadel Investment Group is the largest stakeholder of the company, with 4.5 million shares worth $42.6 million. 

Rowan Street Capital made the following comment about Under Armour, Inc. (NYSE:UA) in its second quarter 2023 investor letter:

“Now, the bottom 3 performers from all the companies that we’d sold were Docusign (DOCU) -76%, TripAdvisor (TRIP) -59% and Under Armour, Inc. (NYSE:UA) -57%. These represent the losses we would have incurred had we held on to these positions until now. We must note that all 3 of these were sold for purely fundamental reasons and we ended up being correct on all of them.”

3. DICK’S Sporting Goods, Inc. (NYSE:DKS)

Number of Hedge Fund Holders: 43

DICK’S Sporting Goods, Inc. (NYSE:DKS) is a sporting goods retailer that operates primarily in the United States. The company’s offerings include hardlines, such as sporting goods equipment, fitness equipment, golf equipment, and hunting and fishing gear products. Additionally, DICK’S Sporting Goods, Inc. (NYSE:DKS) provides a wide selection of apparel, footwear, and accessories. It is one of the best sporting goods stocks to invest in. 

On May 23, DICK’S Sporting Goods, Inc. (NYSE:DKS) reported a Q1 non-GAAP EPS of $3.40 and a revenue of $2.84 billion, outperforming Wall Street estimates by $0.19 and $40 million, respectively. In the first quarter, the company achieved a 3.4% increase in comparable store sales, fueled by a rise of 2.7% in transactions and an increase in the average ticket value.

According to Insider Monkey’s first quarter database, 43 hedge funds were long DICK’S Sporting Goods, Inc. (NYSE:DKS), compared to 40 funds in the last quarter. Stephen Mandel’s Lone Pine Capital is the biggest stakeholder of the company, with 4.5 million shares worth $647.8 million. 

Here is what Baron Fund has to say about DICK’S Sporting Goods, Inc. (NYSE:DKS) in its Q1 2022 investor letter:

“Dick’s Sporting Goods, Inc. was the first stock Michael recommended to us shortly after he joined Baron Capital in 2003. Dick’s share price has since increased about nine-fold. Unfortunately, we sold our investment in Dick’s about six years ago and, although it was a successful investment, we did not realize the full benefit of Michael’s recommendation. We sold too soon because I was concerned that competition from internet retailers would have a permanent negative impact on Dick’s stores’ profitability. I was wrong. Dick’s stock price so far has about doubled after we sold…and its prospects have brightened!

We sold even though we considered Ed Stack, Dick’s Chairman and CEO, a terrific retailer, a great entrepreneur and a special person. Ed had built Dick’s from three bait and tackle stores his dad started into a uniquely positioned, nationwide chain of 730 sporting goods stores. In fact, Dick’s is now the largest nationwide sporting goods chain. Ed had purchased the three bait and tackle stores, the foundation of Dick’s business, from his dad. Ed’s mother loaned him the money to buy his dad’s stores! I’m not exactly sure what that signifies. But it may have something to do with Carl Icahn’s proclamation that “everything I have is for sale except my children…and maybe my wife.”

Ed and his newly appointed CEO Lauren Hobart visited us last month. Ed asked for the meeting to introduce us to Lauren, as well as to discuss the prospects for Dick’s new, large format stores with attached outdoor, student athletic fields. Lauren then described how well its new format stores were doing in two smaller communities. We also spoke about the successes of Dick’s omni-channel retailing efforts and how desirable Dick’s stores have become to shopping centers trying to lure shoppers to return to their malls.”

2. Lululemon Athletica Inc. (NASDAQ:LULU)

Number of Hedge Fund Holders: 64

Lululemon Athletica Inc. (NASDAQ:LULU) specializes in the design, distribution, and retail of athletic apparel, footwear, and accessories under the Lululemon brand. Their product range includes pants, shorts, tops, and jackets for lifestyle activities like yoga, running, and training. Additionally, the company offers fitness-inspired accessories and footwear. Lululemon Athletica Inc. (NASDAQ:LULU) is one of the best sporting goods stocks to invest in. 

On June 1, Lululemon Athletica Inc. (NASDAQ:LULU) reported a Q1 GAAP EPS of $2.28, beating market estimates by $0.29. The revenue increased 24.2% year-over-year to $2 billion, topping Wall Street consensus by $80 million. The company forecasts that in the second quarter of 2023, net revenue will fall within the range of $2.140 billion to $2.170 billion, reflecting 15% growth. The diluted earnings per share are projected to be in the range of $2.47 to $2.52 for the quarter.

According to Insider Monkey’s first quarter database, 64 hedge funds were bullish on Lululemon Athletica Inc. (NASDAQ:LULU), compared to 65 funds in the prior quarter. Andreas Halvorsen’s Viking Global is the leading stakeholder of the company, with 1.89 million shares worth $689.7 million. 

Brown Advisory released its Q2 2020 investor letter and mentioned Lululemon Athletica Inc. (NASDAQ:LULU). Here is what the firm said: 

“The recent market volatility afforded us the opportunity to swap out of our position in TJX Companies into Lululemon Athletica. While nothing at TJX was broken, our action was purely an upgrade from one good business model into an even better one, in our view. We believe Lululemon has an exceptional business model within the athleisure apparel space. The company has complete control over its product line distribution, which is rather unique for an apparel company. This gives the company a favorable margin structure, coupled with a fast-growing top line. As compared to TJX, Lululemon also benefits from a higher percentage of sales from e-commerce, which is becoming more important in the near and long term.”

1. NIKE, Inc. (NYSE:NKE)

Number of Hedge Fund Holders: 81

NIKE, Inc. (NYSE:NKE) is involved in the design, development, and marketing of athletic footwear, apparel, equipment, and accessories worldwide. They offer a wide range of products for men, women, and kids, including both athletic and casual footwear, as well as apparel and accessories. It is one of the best sporting goods stocks to buy. On June 29, NIKE, Inc. (NYSE:NKE) reported a Q4 GAAP EPS of $0.66, falling short of Wall Street estimates by $0.02. On a positive note, the revenue of $12.83 billion outperformed market consensus by $250 million. The company also made share repurchases worth $1.4 billion during the quarter. 

According to Insider Monkey’s first quarter database, 81 hedge funds were long NIKE, Inc. (NYSE:NKE), compared to 71 funds in the prior quarter. Terry Smith’s Fundsmith LLP is the largest stakeholder of the company, with a position worth $825 million. 

Here is what Madison Funds specifically said about NIKE, Inc. (NYSE:NKE) in its Q2 2022 investor letter:

“NIKE, Inc. (NYSE:NKE) is the largest seller of athletic footwear and apparel in the world. Started from humble beginnings as Phil Knight’s “crazy idea” in a Stanford entrepreneurship class, Nike marked its 50th anniversary this year. By remaining true to its innovative culture, the brand is as strong as ever and continues to generate attractive growth, soon to surpass $50 billion in annual revenue. In addition to the continuous investments in brand innovation and marketing, over the last few years Nike has invested heavily to lay the foundation for multi-channel commerce. Today, Nike generates approximately 40% of its revenues through its online channel and branded storefronts. Empowered by CEO John Donahoe’s “Nike Consumer Direct Offense,” Nike’s ongoing investments are expected to further drive their overall revenue mix towards the direct-to-consumer channel which we estimate will result in substantial margin improvement over the next three to five years.

While Nike’s business in China, which accounts for approximately 20% of revenue, is experiencing challenges today, our due diligence suggests that consumer preference for the Nike brand outside the U.S. remains incredibly strong. Overall, we expect Nike’s broader ecosystem, often referred to as the Nike Marketplace, to continue to leverage the company’s innovation and premier brand to build direct consumer relationships which deepen Nike’s competitive moat and enhance its financial profile. Turbulence in the Chinese market and concerns over consumer spending in the US and Europe enabled us to initiate a position in Nike at an attractive discount to our appraisal of the company’s long-term value.”

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