Caitlin Clark is a highly celebrated former NCAA basketball star who was selected as the first pick in the 2024 WNBA draft by the Indiana Fever. She is famous for her record-breaking college basketball career, where she established herself as one of the greatest players in NCAA history, holding the all-time scoring and assist records for both men and women. This Caitlin Clark Mania could be having a bleed-over effect to women’s sports stocks.
Apparel and equipment companies that cater to the women’s sports market, have seen increased trading volume and share price appreciation in recent months. Investors are betting that the surge of interest sparked by Clark and other rising women’s sports stars could drive stronger financial performance for these companies.
So in order to cash in on this mania, here are seven women’s sports stocks for investors to consider in April this year. I feel that these companies present the best opportunities in the market.
Nike (NKE)
Nike (NYSE:NKE) stands out as a global leader in athletic footwear and apparel. It is increasingly focusing on expanding its share in women’s apparel and has introduced several women-centric products and marketing campaigns.
The company’s women’s business has been growing at a high single-digit rate on average over the last three years. Notably, women now make up about 40% of NKE’s membership, with this demographic increasingly representing a larger proportion of new members.
To cater to this growing market, NKE has introduced a range of performance and lifestyle products specifically designed for women. This includes a variety of bras and leggings at various price points, with premium options priced over $100.
In addition to apparel, NKE is focusing heavily on women’s footwear, highlighting the successful Motiva and Free Metcon models.
NKE could be one of those blue-chip options to cash in on the Caitlin Clark mania.
Lululemon Athletica (LULU)
Lululemon Athletica (NASDAQ:LULU) began with yoga clothing and has since expanded into a wide range of women’s athletic wear.
Lululemon Athletica has seen significant growth in its women’s segment, which remains a core focus of their product lineup. At the time of writing, the women’s products generated $6.15 billion, accounting for nearly 64% of their total revenue. This segment has shown consistent growth from $2.79 billion in February 2020.
Another reason I’m bullish on LULU is that analysts forecast strong double-digit EPS growth through FY2027 and beyond. This is also combined with a strong top-line expansion for its revenue.
At $338.98 per share, it may also be ripe for a potential stock split, which could indirectly catalyze further upside potential. I then think that LULU is worth considering to add to one’s watchlist due to these factors and more.
Columbia Sportswear (COLM)
Columbia Sportswear (NASDAQ:COLM) designs and distributes sportswear, including a significant range of products targeted towards women who enjoy the outdoors. Their women’s segment includes clothing like jackets, vests, fleece, pants, and tops, alongside a variety of footwear including boots, hiking shoes, sneakers, and sandals.
For 2023, COLM reported a modest net sales increase of 1% year-over-year, totaling $3.48 billion. Despite a generally challenging year, the company managed to expand its gross margin slightly from 49.4% in 2022 to 49.6% in 2023. This was in part due to a significant reduction in inventory levels, which dropped 27% compared to the previous year.
However, looking at earnings, COLM reported a fourth-quarter 2023 EPS of $1.86, which fell short of the consensus estimate of $2. Analysts currently estimate that COLM’s EPS will grow to $4.41 in 2024, up from $3.70 in the preceding year. This then makes it one of those women’s sports stocks to consider.
Hibbett Sports (HIBB)
Hibbett Sports (NASDAQ:HIBB) is a prominent retailer offering an extensive selection of sports goods, including athletic apparel for women.
They offer a variety of women’s shoes and sneakers, including popular brands like Nike, Adidas, and Jordan. HIBB also addresses the casual and fashion-oriented needs of their female customers. Their offerings include stylish casual shorts and athleisure wear.
The third quarter of fiscal 2024 saw a minor decrease in net sales, down 0.3% year-over-year, with a notable decline in brick-and-mortar sales but a significant increase in e-commerce sales. The third quarter net income was stable compared to the previous year, with a slight increase in earnings per share from $1.94 to $2.05.
HIBB has provided guidance for the fiscal year 2025, forecasting that total sales could remain flat or increase up to 2% compared to the fiscal year 2024. Despite this, the expected number of new store openings is between 45 to 50 for the year.
DraftKings (DKNG)
DraftKings (NASDAQ:DKNG) offers sports betting and fantasy sports, capitalizing on the growing legalization of sports betting across the U.S. It’s widely considered a market leader, including for the women’s segment of the market.
The company’s performance in the fourth quarter of 2023 was strong, with revenue hitting $1.23 billion, a 44% increase from the previous year. The monthly unique payers (MUPs) during this period grew by 37% year-over-year. DKNG also plans strategic expansions, including the acquisition of Jackpot for $750 million.
Perhaps due to it strong momentum, DKNG has raised its financial outlook for 2024, projecting a revenue range of $4.65 billion to $4.9 billion, reflecting a significant year-over-year growth of 27% to 34%. This increase comes from the initial range of $4.50 billion to $4.80 billion.
Madison Square Garden Sports (MSGS)
Madison Square Garden Sports (NYSE:MSGS) is a major player in professional sports, owning teams like the New York Knicks (NBA) and the New York Rangers (NHL). Additionally, MSG hosts games for the New York Liberty, a professional women’s basketball team in the WNBA, which make it one of those women’s sports stocks to consider.
MGS’s financial performance was solid last year with total revenues reaching $887.4 million, marking an increase from the previous year. The company also noted an operating income of $85.2 million and an adjusted operating income of $115 million.
Meanwhile, for the fiscal first quarter of 2024, MSGS announced a net cash usage in operating activities and a slight increase in cash reserves. This is against a moderating backdrop of demand for apparel stocks across the board.
Analysts are expecting a significant increase its in earnings over the next twelve months, as its forward P/E of 76 times earnings is significantly lower than its trailing P/E of 112.
Under Armour (UA)
Under Armour (NYSE:UA) designs and sells a wide array of sports and casual apparel, including a significant focus on women’s athletic wear.
For 2024, UA has provided guidance that reflects some challenges in the retail environment but also points to some light at the end of the tunnel. The company reported a revenue of approximately $1.49 billion for the quarter ending December 31, 2023, which marked a 6% year-over-year decrease. Despite the revenue drop, gross margin improved by 100 basis points to 45.2%. The net income for this period rose to $114 million.
However, UA’s stock performance has been less favorable, with a 25.4% decline in share price since the beginning of 2024. Currently, the stock is priced at around $6.56, with analysts suggesting a potential upside, projecting a target price average of $8.65 for the next twelve months, which could represent a 31.9% increase from its current level.
I still think that UA is one of those women’s sports stocks to buy as this dip has improved its valuation significantly, with it trading at 5-yearly lows.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.