Investing.com -- Baird has turned more cautious on apparel, footwear and fitness stocks, downgrading several names as it sees rising risks heading into the fourth quarter.

Analyst Jonathan Komp cut adidas, Dick's Sporting Goods, Nike, Rocky Brands and VF Corp to Neutral, and added bearish "fresh picks" on Under Armour and Canada Goose through mid-November.

He said the group has performed poorly this year, with the median stock down 17% versus a 12% gain for the S&P 500, challenging the firm's recovery thesis.

Komp noted that sentiment, which bounced early in 2026, has since been pressured by Middle East developments and the resulting higher oil prices and interest rates, fueling concerns about an eventual fall-off in consumer spending.

Choppy monthly spending and more cautious retailer commentary have raised worries that lower- and middle-income consumers are feeling the pinch.

He also flagged potentially warmer U.S. weather, WTI crude back at or above $100 a barrel, 10-year Treasury yields near 5% and an uptick in promotions as reasons for caution, warning that consensus estimates beyond the third quarter look aggressive, especially for Canada Goose, Under Armour and VF Corp.

Komp trimmed his Outperform-rated list to what he called his "highest-conviction ideas," which are Amer Sports, On Holding, Kontoor Brands, Wolverine World Wide, Boot Barn and Crocs.

He acknowledged the group looks washed out on valuation with major buyback capacity, but said that may not matter over the next few months if oil and inflation concerns persist.