(BRK.A), (BRK.B)
In the dynamic world of performance running footwear, Brooks Running, a subsidiary of Berkshire Hathaway, emerged as a frontrunner in 2023, achieving remarkable milestones and solidifying its position as a leader in the industry. The company reported a record revenue growth of $1.2 billion, marking a significant 5% increase year over year. Moreover, Brooks witnessed a historic achievement of selling over 20 million units, showcasing its widespread consumer appeal and market penetration.
Since 2018, Brooks has consistently demonstrated impressive growth, boasting a compound annual growth rate surpassing 14%. This growth trajectory continued in 2023, particularly in North America, where revenue surged by 7%, surpassing the $1 billion mark for the first time in the region’s history. This achievement underscored Brooks’ effective multichannel business strategy, which included inventory optimization, strategic investments in key markets, and the delivery of premium performance products across various regions.
The success story of Brooks extends beyond financial metrics, as evidenced by its dominant presence in the adult performance running footwear market. The brand maintained its coveted position as the top player in the U.S. retail market, capturing a remarkable 21% market share throughout the year. Key products such as the Brooks Ghost and Adrenaline GTS shoes emerged as the top two adult performance running styles, commanding over 12% share collectively. Additionally, the Brooks Ghost garnered recognition in the fitness tracking realm, being among the top running styles on the popular app Strava.
Jim Weber, CEO of Brooks, expressed enthusiasm about the brand’s prospects, stating, “There has never been a more exciting time to be in run, especially for a brand as focused on it as Brooks.” He highlighted the thriving landscape of the U.S. retail market and the global increase in participation, emphasizing Brooks’ readiness to cater to a diverse audience seeking the physical, mental, and social benefits of running.
Brooks’ commitment to innovation remained unwavering in 2023, with a particular focus on product development. The performance running category experienced robust growth, outperforming the overall footwear market in the U.S. Brooks seized this opportunity by introducing the all-new Ghost Max, a groundbreaking addition to its Ghost franchise. The Ghost Max garnered unprecedented retail adoption, contributing to Brooks’ notable market share gain in the footwear segment.
For 2024, Brooks aims to build on its momentum with a robust pipeline of product launches and innovations across core footwear offerings. The brand’s strategic expansion efforts will focus on enhancing brand engagement and reaching a broader audience of runners, fitness enthusiasts, and walkers seeking high-performance products.
Brooks’ global success story extends beyond North America, with significant growth witnessed across regions through its multichannel strategy. Europe emerged as a promising market, with notable sales growth in key countries like Germany and France. In addition, Brooks’ direct-to-consumer channels experienced substantial revenue growth, reflecting the brand’s ability to engage consumers through digital platforms and loyalty programs.
Dan Sheridan, President and COO at Brooks, emphasized the company’s resilience in navigating challenges such as supply chain disruptions and economic uncertainties. He expressed confidence in Brooks’ strategic direction and reiterated the brand’s commitment to supporting its customers and the global running community.
In 2023, Brooks also reaffirmed its dedication to elite athletes and the broader running community through increased investments in sustainability initiatives, community activations, and collaborations with key partners. The brand’s Future Run program, aimed at supporting youth running programs and promoting diversity in the industry, impacted thousands of young runners, underscoring Brooks’ commitment to driving positive change within the running community.
As Brooks Running continues to set new benchmarks in the performance running footwear market, the brand’s unwavering dedication to innovation, customer engagement, and community impact positions it as a formidable player in the global athletic footwear industry.
© 2024 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.