Nike’s sag­ging swoosh

Daily Freeman (Kingston, NY) - - BUSINESS -

Nike shares have lost nearly 18 per­cent of their value this year and are trad­ing near 52-week lows. It’s a con­sis­tently prof­itable com­pany and one of the world’s top brands, so why is this su­per­star’s stock sag­ging?

In­creased com­pe­ti­tion from ri­val ath­letic wear com­pa­nies Adi­das and Un­der Ar­mour and slow­ing sales are the pri­mary is­sues that have in­vestors con­cerned.

A year ago, Nike set a goal of reach­ing $50 bil­lion in an­nual sales by 2020. But shortly after the an­nounce­ment, rev­enue started to slow. Its most re­cent quar­terly report did lit­tle to boost con­fi­dence: “fu­tures or­ders,” a closely watched stat among Nike an­a­lysts, were up just 1 per­cent in North America. That in­di­cates weak de­mand for the com­ing sea­sons.

An­a­lysts re­main con­cerned Nike may not reach its long-term goals. The pri­mary is­sue seems to be gains by Adi­das and Un­der Ar­mour.

“Nike is a fan­tas­tic com­pany,” said Camilo Lyon, an an­a­lyst at Canac­cord. “How­ever, we be­lieve a sig­nif­i­cant brand shift is un­der­way that could per­sist for the next (one to two) years be­fore re­vers­ing.” Susque­hanna Fi­nan­cial Group an­a­lyst Sam Poser is more bullish, say­ing it’s in “Nike’s DNA to re­spond skill­fully and force­fully when chal­lenged” and that the stock’s weak­ness is a chance to buy. Data based on fis­cal year

Sources: Com­pany earn­ings re­ports

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