Market Monitor: Outdoor & Recreation
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2024 Outdoor & Recreation Market
Market Growth & Increased Participation
2024 was a pivotal year for the Outdoor and Recreation industry, with participation rates rising 4.1% year-over-year, reaching 57.3% of the U.S. population. This surge fueled higher spending on outdoor products, strengthening the market’s recovery.
Inventory Challenges & Strategic Management
Despite growth, inventory overstocking from previous years posed challenges for some segments. However, businesses adopted more efficient inventory management strategies, improving gross margins and financial performance across the sector.
M&A Rebound & Strategic Transactions
For the first time in two years, M&A activity increased, with strategic buyers driving 71% of deals. Privately held companies led acquisitions, while public buyers focused on internal restructuring. However, with inventory pressures easing, public strategic buyers are re-entering the M&A space, as seen in Kontoor’s $900 million acquisition of Helly Hansen.
Resilient Valuations & Strong Brand Equity
Companies with strong brand equity and high gross margins maintained resilient valuations. The Sporting Goods segment saw increased buyer interest, reflecting expanding market opportunities and growth potential.
Tariffs & Competitive Advantage
A key industry concern is potential tariffs, which could increase production costs and lead to higher retail prices and weaker consumer demand. However, businesses with strong margins and agile operations may capitalize on this shift to gain market share.
2025 Outlook: Continued Growth & Momentum
The industry is poised for sustained expansion in 2025, driven by:
- Higher participation rates
- Improved inventory management
- Rising M&A activity
With positive long-term trends and strategic business shifts, the Outdoor & Recreation market is set for a healthy and active year ahead.
For more information or questions, please contact our contributors:
Rich Anderson, Managing Director: randerson@
Tyler Dale, Managing Director: tdale@hexagoncapitalalliance.
Johnny Sherwood, Director: jsherwood@
Brennan Anderson, Vice President: [email protected]