An In-depth Look at Footwear Retail YTD

The NPD Group, Inc. | Proprietary and Confidential The NPD Group, Inc. | Proprietary and Confidential

Copyright 2015. The NPD Group, Inc. All Rights Reserved. This presentation is Proprietary

and Confidential and may not be disclosed in any manner, in whole or in part, to any third

party without the express written consent of NPD.

The U.S. Footwear Industry

Market Drivers 12 months ending Jun ‘15

Prepared for FDRA members

September 2015


Introduction

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Highlights

■ Women’s footwear represents the largest wearer segment, and generated an absolute dollar gain around +$1.3B. Men’s footwear also contributed over +$1B in incremental sales.

■ Millennials drove industry dollar growth, particularly ages 25-34. This segment increased +37%. But still keep watch on 65+ consumers which increased +14%, generating over +$500MM in growth volume.

■ Online footwear sales totaled $15 billion, up +13% in dollar sales. 23% of total footwear dollar sales are generated online.

■ Performance footwear contributed the largest dollar volume growth of about +$2B. Outdoor footwear also increased at a similar pace (+10%), generating almost +$500MM in incremental sales as consumers gravitate towards styles that facilitate an active lifestyle (or make them feel/look like they have one).

■ The South Region contributed dollar growth volume of about +$1.5B. The region increased +7%. Most of the growth came from South Atlantic region, which drove almost half of the South’s growth.

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The total footwear market is estimated at $64B for the 12 months ending (ME) Jun’15 and grew +5% YOY. Footwear has benefited from consumers’ increased spending on health and wellness categories, driving the comfort and athletic markets.


0% 5% 10%

Footwear Market Sales Drivers 12ME Jun’15

4

-4% 0% 4% 8% 12%

$0$25$50$75

Millions

$0$25$50$75

Total

Women’s

Men’s

Children’s

Total

Store

Website

Other

Dollar Volume ($ Billions) Dollar Sales % Change


The total footwear market is estimated at $64B for 12ME Jun’15, up +5% YOY.

Total Footwear by Method of Purchase

■ Women’s and men’s footwear both generated over +$1MM in incremental sales vs. LY. However, children’s footwear increased at the fastest rate of +8%.

■ Online footwear sales continued to drive total market growth with an increase of +13%, or about +$1.7B in growth dollars. Online sales contributed over half the growth in total footwear.

Dollar Distribution

100%

74%

23%

3%

Source: The NPD Group/Consumer Tracking Service



5

$0$10$20$30 0% 5% 10% 15%

$0$10$20$30 0% 5% 10%

Total Footwear by Category

Total Footwear by Type

■ Performance footwear is the second largest category, and contributed the largest dollar volume growth of about +$2B. Although a much smaller category, outdoor footwear also increased at a similar pace generating almost +$500MM in incremental sales.

■ Sneakers continued to increase (up +6%), driving almost 40% of footwear’s overall growth. Both boots and sandals increased +8% vs LY, together contributing nearly +$2B to total footwear sales.

Casual

Performance

Dress/Evening



Sneaker

Shoe

Boot

Sandal


Sport Leisure

Outdoor

Work/Safety



6

0%10%20%30% -40% -20% 0% 20% 40%

0%10%20% -10% 0% 10% 20%

Total Footwear by Age of Wearer

Total Footwear by Income

■ Growth in the footwear market is being driven primarily by the older Millennial segment (ages 25-34), generating over +$1B in growth volume. 65+ consumers are also a notable driver, with a dollar increase of +14%.

■ Spending among $75-$100K households increased +15% generating the most incremental dollar sales of all the segments (+$1B).

■ $200K+ consumers’ footwear spend continued to rise and outpace the rest, with an increase of +36%.

Dollar Share % Dollar Sales % Change

Dollar Share % Dollar Sales % Change

Under 13

13-17

18-24

35-44

45-54

55-64

65+

25-34

Under $25K

$25K-$50K

$50K-$75K

$75K-$100K

$100K-$150K

$150K-$200K

$200K+




7

$0$10$20

Millions

-10% 0% 10% 20%

Total Footwear by Ethnicity

Total Footwear by Region

■ Growth in the footwear market came from White consumers, who generated over +$1.6B in growth dollars. Hispanic consumers’ dollar sales growth outpaced the rest of the market, increasing +9%. This increase contributed about +$1.2B in incremental sales.

■ The South Region generated the largest dollar growth volume of about +$1.5B. The region increased +7%. All sub-regions grew, but the greatest incremental sales came from the South Atlantic (+$700MM).

New England

Middle Atlantic

East North Central

West North Central

South Atlantic

East South Central

West South Central

Mountain

Pacific

100%

Central

South

West




$0$20$40

White

Hispanic

Black

Asian

Other

-5% 0% 5% 10% 15%


Industries

Automotive

Beauty

Consumer Electronics

Entertainment

Fashion

Food / Foodservice

Home

Luxury

Mobile

Office Supplies

Sports and Leisure Trends

Technology

Toys

Video Games

Countries

Australia

Belgium

Brazil

Canada

China

France

Germany

India

Italy

Japan

Mexico

Netherlands

New Zealand

Poland

Russia

South Korea

Spain

Sweden

Turkey

United Kingdom

United States

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