Wearables/Data Collection Will Be Getting Some Attention At CES 2017

KeyBanc Capital’s Brad Erickson took a look at the key themes associated with wearables and data collection ahead of the 2017 CES tradeshow to be held in January.

Fossil Group

The analyst expects Fossil Group Inc FOSL to provide greater details regarding the market reception for its wearable strategy. They maintain an Outperform rating on the company.

The holiday 2016 period is expected to be critical for Fossil Group, since it would be the first period when the company would have offered a full suite of smartwatches, trackers and hybrids.

In addition, Erickson stated that channel checks post-Christmas “point to strong holiday sell-through and out of stocks, particularly surrounding the Michael Kors Holdings Ltd KORS smartwatch offering.”

The analyst believes that Best Buy Co Inc BBY is also well positioned to gain market share in the wearables category.

Garmin

On the other hand, Erickson expects Garmin Ltd. GRMN to make new product announcements, especially in the Outdoor and Fitness categories, while management commentary is likely to be upbeat, particularly regarding fitness, consistent with the company’s recent positive tone.

“Still, given our bearish views on the wearables category overall, which we think is largely saturated, we need more confidence in Garmin's ability to take share… to drive growth before becoming more constructive,” the analyst said, while maintaining a Sector Weight rating on the company.

Under Armour

In addition, although Under Armour Inc UAA has pre-announced the launch of its UA Record Equipped running shoes, the focus at the CES 2017 is likely to be on the company’s connected fitness ecosystem.

“We expect data collection from UA’s connected fitness ecosystem and use of this data to be important, as it deemphasizes its branded wearables and focuses on an open platform,” Erickson mentioned.