Nike lowers forecasts. Shares fall significantly today before the market opens.
I don't need to introduce Nike $NKE-0.3%, maybe all of us have something from them at home. They didn't please their shareholders much today and are writing off as much as 12% before the market opens.
Other sportswear companies are also falling with this announcement after weak consumer spending forced the Air Jordan 1 shoe maker to cut its annual sales forecast and signal a change in its profit-over-sales strategy. Shares of rivals Adidas and Puma down about 5% each, with Lululemon down 2% and Under Armour down about 6%.
The company on Thursday also unveiled a $2 billion cost-savings plan and said it was taking a "more cautious approach" to planning for the rest of the year, blaming the forecast cut on weakness in its online business and increased promotions.
Some analysts said Nike $NKE-0.3% could also lag in innovation and lose share to other brands such as Lululemon and Deckers Outdoor's Hoka.
Nike
NKE"Nike needs increased and improved marketing investment while Hoka, On and Lululemon continue to expand with increased customer acquisition and retention," TD Cowen analysts said after downgrading the stock to "market perform" from "outperform."
Nike also revealed plans to simplify its product lineup, increase automation and introduce fresher styles to attract consumers.
"While we think this (cost-savings plan) is a positive shift, it will take some time to see a proliferation of new products and innovation, and soft macro will continue to pressure results in the meantime," said Abbie Zvejnieks of Piper Sandler. The broker lowered its target price to $107 from $112.
I've had this company in my portfolio for as long as I've been investing, but so far always only briefly, about a couple of weeks, so I've been taking it as a sort of "longer" trade. I want to gradually build a dividend portfolio so the company doesn't fit into it that much, however, picking up these situations, dips and going in for growth may pay off. I personally trust this brand, even though there are plenty of them on the market. 😊 What about you?
Thanks for the info, I subscribe a lot. It seems to me that they've always had a lot of marketing mastered, and it kind of seems to me that they're leading the way in innovation.
🙏 I agree, I take the drop as an opportunity for shareholders who like the company. Nike has strong marketing, you see it a lot in the sports world.
I understand:)
With such a premium, any shortfall in results is duly punished - and rightly so.
Yes, but I think now, respectively, a price under 100$ is fine for me.
I guess it could be. I would strictly lean more towards 90.
I'll have to see how the analysts base those assumptions for "lagging innovation". Nike isn't just known for perfect marketing, but just for its technology that is always one step ahead of the competition. The stock has been expensive, so it is currently back to somewhere around its 5 year average.
I don't know their technology either, but I think it's a very good company. The price is cool now, I used to buy under $100 and that seems fair to me.
The company is unreal. If you don't have Nike among the youth, it's like you don't exist. This company has a bright future.
I agree, it will still work they just need to keep targeting people well, which hopefully will keep their marketing going. Their shoes are also traded on the shoe exchange. 😁
I don't buy running shoes other than Nike - pegasus. They are worn by all the athletics trainees. Nike shoes have about 70% of athletes.
They write off a lot...
Yep, could read this, would be a nice short today. 😂
Exactly! :D