Missing winter vacation: Ski stocks are doing bravely

R.and 20 to 25 percent fewer orders from retailers are reported by the ski manufacturers this year – only in the case of helmets and caps are the decreases less drastic. No wonder: For many people, skiing holidays are canceled this year. Instead, some do winter sports in the low mountain ranges and their onslaught of resentment among residents.

Still others limit themselves to dry skiing at home: computer games such as “Family Ski” for Nintendo Wii make it possible to stand on a so-called “balance board” in an exemplary ski position in your own living room for a descent or a slalom on the television to be completed – ski school for the children included.

The stocks related to the ski holiday business are still doing relatively bravely. This is also due to the fact that many well-known ski manufacturers, whose shares were previously listed on the stock exchange, are now part of larger conglomerates, in which a year with poor winter sports business is less important than before. The once listed ski manufacturer Völkl is now owned by the investment company Kohlberg & Co. Atomic and Salomon belong to the Finnish Amer Sports, which in turn was taken over by the Chinese provider Anta Sports.

The Anta share has not performed badly recently: the price has risen by more than 70 percent since August last year, albeit with a small setback in the second half of December. Analysts say that at the big company that is strong in athletic shoes in China, the winter sports business is not a big deal.

Sales drivers running and soccer

Even for the major sporting goods manufacturers such as Nike or Adidas, winter sports do not play an important role, says Thomas Jökel, portfolio manager at the fund company Union Investment. “The areas of training, running, football and basketball are the main sources of revenue.” Since the winter sports business is “tough, seasonal and weather-dependent” anyway, the big players are only cautiously involved here.

In America, Columbia Sportswear is a well-known retailer of ski fashion. Its share already suffered a slump at the end of October last year, but has since recovered somewhat. Since August 2020, there has been a price increase of 17 percent. It was similar with the listed French ski resort operator Compagnie des Alpes: there was a slump in prices in October last year – followed by a recovery.

“The big losers due to the unusual ski holiday are the ski areas themselves – hotels, lift operators, ski huts and ski rentals,” says Eric Heymann from Research at Deutsche Bank. These main losers are often family businesses and other smaller regional companies, and only rarely are listed companies. “In comparison, the ski outfitters should be less noticeable of the losses, and they can also hope for catch-up effects in the next season,” says Heymann.

Finally, it is still not ruled out that a little skiing holiday may still be possible in the further course of the year. “Many ski areas are currently preparing their slopes, for example with artificial snow, which suggests that they are still awaiting some ski season,” says the Deutsche Bank analyst. I hope so.

“Overall, the sporting goods manufacturers are doing quite well, as people continue to pay attention to their wellbeing during the lockdowns and outdoor sports are allowed even in the areas most severely affected by the virus,” says Aneta Wynimko, manager of the Consumer Fund at the fund company Fidelity. Winter sports are going well in China, which has the coldest winter in the last 60 years: “In Europe, not many people enjoy traditional winter sports such as skiing, but many people run and train outside in winter equipment – all in all, I still like it the sporting goods manufacturer and have several corresponding papers in my fund. “

On the stock exchange, the main question that is currently being traded is how well or how badly the various industries are likely to emerge from the corona crisis. In this regard, Heymann is rather confident for the ski business. He doesn’t believe that everyone is getting so used to computer games or tobogganing at home as a substitute for skis that they will want to forego the physical experience of skiing in the future. “While I am very skeptical that business trips will return to their old volume so quickly after the pandemic, people will want to travel again as soon as possible and also want to go skiing,” says Heymann.

But there are also winners when it comes to skiing in your own apartment. Internet companies and game manufacturers benefit as “stay-at-home” shares from the repeated lockdown anyway. The shares of the game manufacturer Nintendo, for example, have risen by more than 40 percent since August last year. But home fitness equipment is also sought after as a substitute for skiing holidays, according to Deutsche Bank.

“Part of the budget that is not needed for a skiing holiday goes to such areas,” says Heymann. “I myself just had to skip my skiing holiday – but I bought an indoor rowing machine last year.” In contrast, hardly any branch of the company benefits from the “run” on the German low mountain range: “All the restaurants are closed.”


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