Evaluating 2026 Shoe Stock Picks: TAM, Scalability, and the Path to Market Share Dominance

The foundation for any growth story in footwear is the sheer size and momentum of the underlying market. Globally, the industry is set for steady expansion, with the total addressable market projected to grow from USD 371.81 billion in 2025 to USD 555.68 billion by 2035, a compound annual rate of about 4.1%. This growth is fueled by powerful secular trends: rising global obesity rates, a surge in fitness-conscious consumers, and the accelerating shift to e-commerce. In North America, the TAM is substantial and growing, estimated at around USD 120 billion as of 2023, with the athletic segment alone representing roughly 40% of that total. This creates a vast, expanding pie for any company with a scalable model and a compelling product offering.

Against this backdrop, company performance diverges sharply. The high-performing players are capturing a disproportionate share of this growth. Amer Sports exemplifies this, reporting revenue increased 30% to $1.756 billion in its third quarter of 2025, with all four regions accelerating and its Salomon footwear business reaccelerating. This explosive growth, particularly in Greater China where it grew 47%, demonstrates a powerful ability to scale and take market share within the global athletic segment. Similarly, On Holding is executing a deliberate growth strategy, achieving revenue growth of 18% in 2024 and expanding into five new markets, positioning itself for continued penetration in the premium running and performance niche.

The contrast with struggling peers is stark. Nike, a dominant historical player, is facing significant headwinds, with full-year revenues down 10% to $46.3 billion for fiscal 2025. This decline reflects a broader challenge in maintaining momentum within the athletic segment. Steven Madden, focused on fashion-forward footwear, shows a more modest but still positive trajectory, with revenue up 6.9% to $667.9 million in its third quarter. However, its profitability is under pressure, with operating income as a percentage of revenue nearly halving year-over-year. This divergence highlights a critical investment question: which companies are best positioned to ride the TAM wave, and which are getting left behind? The data suggests that for growth investors, the path to dominance lies with those scaling fastest within the expanding athletic segment.

Scalability, Margins, and Financial Levers

The path from a growing Total Addressable Market to sustainable, high-margin growth is paved with operational execution. Here, the financial performance of these shoe stocks reveals stark contrasts in scalability and profitability.

Nike's recent quarter presents a classic growth-versus-margin dilemma. The company delivered a better-than-expected revenue beat, with Q4 sales of $12.43 billion. Yet this top-line strength came with a significant trade-off, as its operating margin contracted to 8% from 11.2% a year ago. This pressure is a direct result of the company's strategic shift toward higher-cost direct-to-consumer (DTC) and e-commerce channels, which are essential for capturing more value but initially compress margins. For a growth investor, the key question is whether this margin compression is a temporary cost of building a more resilient, profitable future model, or a sign of deeper competitive erosion. The flat year-on-year revenue underscores the challenge of converting TAM into growth without sacrificing profitability.

In contrast, Amer Sports is demonstrating a scalable model that drives both top-line acceleration and margin expansion. Its 30% revenue surge to $1.756 billion in Q3 2025 was powered by all four regions accelerating, with Greater China leading at 47%. This isn't just volume growth; it's growth across its premium technical portfolio, which inherently commands better margins. The company's ability to reaccelerate in key segments like Salomon footwear and technical apparel shows a powerful, repeatable engine. This operational leverage-where growth in high-margin categories fuels overall profitability-is the hallmark of a scalable business.

Steven Madden's story highlights the vulnerability of a model under cost pressure. While it posted revenue growth of 6.9% to $667.9 million, its profitability was severely strained. The company's operating income as a percentage of revenue nearly halved year-over-year, falling to 4.7%. This was driven by a sharp increase in operating expenses as a percentage of sales. For a growth investor, this is a red flag: modest revenue expansion is being consumed by rising costs, leaving little room for reinvestment or margin improvement. The company's fashion-forward focus may limit its ability to command premium pricing, making it harder to offset these pressures.

On Holding offers a different growth narrative, one built on innovation and market expansion. The company achieved 18% revenue growth in 2024 and expanded into five new markets, a strategy that directly targets TAM capture. Its high analyst price target, with an average forecast of $61.38 and a consensus "Moderate Buy" rating, reflects confidence in this path. The company's focus on innovative running shoes and its strategic production footprint in Asia aim to balance cost efficiency with product differentiation. The key scalability lever here is its ability to consistently launch new product lines and enter new geographies without sacrificing its core innovation edge.

The strategic shift to DTC and e-commerce is a critical financial lever for all players. Evidence shows this model is gaining market share, forcing brands to adapt their entire operations from sourcing to retail connection. For Nike, it's a costly but necessary investment. For Amer Sports and On, it's a channel that amplifies their premium brand positioning. For Steven Madden, it's a cost center that's currently overwhelming its modest growth. The bottom line is that scalability isn't just about sales growth; it's about building a financial model where that growth translates efficiently into higher profits and shareholder value.

Catalysts, Risks, and What to Watch

The growth thesis for these shoe stocks hinges on a few near-term catalysts and a handful of long-term risks that will determine whether their current momentum is sustainable.

For Nike, the immediate catalyst is the company's own Q4 2025 earnings report, which showed flat year-on-year revenue at $12.43 billion and a significant drop in operating margin. The key signal to watch is whether the "Win Now" actions are beginning to stabilize the business. Investors need to see signs that the strategic shift to DTC is starting to pay off in terms of sales growth and margin recovery, rather than just a one-time earnings beat. The next major data point will be the full-year 2026 results, which will show if the company can reverse its 10% full-year revenue decline and demonstrate a clear path to improving profitability.

On Holding's critical near-term event is its upcoming Q4 2025 earnings call, scheduled for March 3, 2026. The company's stock has been buoyed by strong momentum, with its price target rising 30% in the last five quarters. The market is watching for confirmation that its 18% revenue growth in 2024 and expansion into five new markets are translating into continued profitability and operational execution. A solid Q4 report would validate the bullish price target of $61.38 and reinforce the narrative of scalable innovation.

The primary near-term risk for all premium players is the sustainability of their pricing power. Tariffs remain a top concern for the industry, with leaders anticipating higher footwear prices that could dampen demand. Brands like Nike and On must demonstrate that their product differentiation and storytelling can offset this sticker shock. The risk is that cost pressures from tariffs and raw materials eat into the premium margins that fuel their growth engines.

Looking further ahead, the long-term risk is failing to meet the accelerating shift toward sustainability. The industry is moving toward bio-based materials and circular design as a necessity, not a niche. Companies that lag in adopting these innovations-whether through new materials like mushroom leather or closed-loop recycling systems-face a reputational and regulatory headwind. This isn't just an environmental issue; it's a business model risk that could undermine brand loyalty and access to future markets. For growth investors, monitoring each company's progress on these fronts will be essential to assessing their long-term TAM capture potential.