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Why Women Are Boosting Top-Line Gains for Activewear Retailers

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Women’s fitness boom: A key athleisurewear driver

A large part of the revenue upside seen by the athleisurewear category is due to the changing preferences of women. The growing trend toward more casual apparel at work, higher sports participation, and more fitness activities for women is fueling a boom for activewear.

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Sports companies see upside in women’s demographic

Nike’s (NKE) women’s business had global sales of $5.7 billion in fiscal 2015 compared to $4.5 billion in fiscal 2013. It’s the world’s number-one athletic brand for women. Under Armour’s (UA) women’s business generated sales of almost $750 million in 2015. Most of this was in the United States.

Adidas (ADDYY) also has several sportswear lines, including Adidas Originals and one under the Stella McCartney designer name.

Nike, Under Armour, and Adidas derive most of their sales from men’s products. But due to the increase in women’s sports and fitness activities, they’re increasing their promotional bent toward women’s apparel through digital campaigns and by signing on more celebrities. These companies are looking at faster-than-average growth from their respective women’s businesses.

Nike and Under Armour together constitute ~1.0% of the First Trust Consumer Discretionary AlphaDEX ETF (FXD).

LULU’s demographic shift

Lululemon Athletica (LULU) has been one of the forerunners catering to the women’s segment. As we saw in the last article, LULU has seen more than 20% growth rates in sales in the last five years. In the United States, sales have grown at a CAGR (compounded annual growth rate) of more than 47% from fiscal 2010 to fiscal 2015, partly spurred by new store openings.

Lululemon derives most of its sales from women’s apparel products. Now it’s looking to expand its men’s business. The company’s apparel designs are more versatile than the performance wear sold for more serious athletes by Nike and Under Armour.

In the next part of this series, we’ll see how more mainstream retailers are reacting to growth in the activewear category.

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