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The +6% overall sales growth for March 2018 represents the second consecutive month with positive YoY sales performance within the last 12 months, pushing Q1 2018 into positive growth territory with 3% YoY growth compared to Q1 2017.  That in and of itself is worth celebrating, but there are other reasons that lead us to believe that we could be at the beginning of an upward swing for the core channel.
While the February growth was primarily driven by retailers on the West Coast the growth in March was positive in all geographic regions, including the Northwest, Southwest, South, Northeast and Midwest.  In terms of the broad categories the primary growth driver once again was Apparel, which was up +12% overall (+13% for women, +7% for men), followed by Wetsuits (+12%),  Hardgoods (+6%) and Accessories (0%), while Footwear declined by -4% (Men’s -3%, Women’s -7%).
Similar to February, what is very encouraging about the March results is that there are many bright spots in terms of specific individual categories that experienced growth. On the women’s side we once again saw strong double-digit growth for Tops in L/S T-Shirts (+75%), S/S T-Shirts (+38%)Sweaters (+26%), Fleece/Hoodies (+20%) and Jackets (+14%).  In addition, there are signs of strength in Bottoms/Completes with growth in Fleece Pants (+107%),Denim (+49%), Skirts (+49%),Shorts (+28%),Swimwear (+17%), and Pants (+16%).  In Women’s Accessories we saw strong double-digit growth in Tote Bags (+64%)Socks (+26%) and Sunglasses (+18%)while Wetsuit Accessories (+14%) and Rashguards (+31%) grew in Women’s Wetsuits. Even one of the Women’s Footwear categories, Sport Shoes, experienced +4% growth compared to the same month last year.
In the larger men’s categories we also found quite a few segments to highlight, although there are fewer than there were in February. For Tops we can point to L/S T-Shirts (+58%),Jackets (+32%),Fleece/Hoodies (+20%), and Wovens (+10%), while the Bottoms/Completes were led by Fleece Pants (+200%), Boardshorts (+7%), Denim (2%) and the much smaller Swimwear (other than Boardshorts) category with +67% growth.  In men’s accessories the bright spots included Belts (+34%),  Backpacks (+14%), Wallets (+10%)Sunglasses (+3%)Hats (+1%), and the much smaller Tote Bags category (+130%), while Wetsuit Accessories (+135%)Rashguards (+23%) and  Standard Wetsuits (+5%) led the way in the Wetsuit category.  Not to be left out, two of the men’s footwear categories grew; Casual Sandals at +111% growth compared to the same month last year and, more importantly, the Sport Shoes category grew +6% YoY.
In a sign that much of the momentum in Apparel sales growth is generated by core surfers and skaters, we are delighted about positive sales growth in many of the core Hardgood categories, similar to what we saw in February.   In February and March we witnessed YoY sales growth in several of the core surf and skate hardgoods categories, including Surfboard leashes (+7%)Traction Pads (+9%), Surfboard Fins (+2%), Short Skate Decks (+8%), Short Completes (7%) Long Completes (+1%), Griptape (+3%) and Trucks (+9%), Wheels (7%).  Other Hardgood categories with growth includes Wakeboard Hardgoods (+21%), Softboards (+27%), Bodyboard Hardgoods (+5%) and Protective Gear (+28%).

We should once again exercise caution and not get carried away with 2 consecutive months of YoY $sales growth, but since we are seeing strong results for all geographies, for both genders and across many categories it gives us valid reasons to be optimistic.  A real test for whether we are at the beginning of a consistent growth cycle comes next month, because April 2017 was a very strong growth month strong due to the Easter holiday shifting to the month of April last year.

 

 

Let’s hope for more good news to come as we move towards the summer.  Here is to a very good March and let’s hope the positive momentum continues with April sales!

 

 

Patrik Schmidle – ActionWatch