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Home>UPDATE: Nike earnings: Even Jordan can't clear hurdles in the athletic sector

UPDATE: Nike earnings: Even Jordan can't clear hurdles in the athletic sector

UPDATE: Nike earnings: Even Jordan can't clear hurdles in the athletic sector

09/26/2017

By Tonya Garcia, MarketWatch

Nike must contend with a slowdown in the basketball category and a promotional environment

Nike Inc. is expected to announce first-quarter earnings on Tuesday after the closing bell.

Nike (NKE) has struggled recently with what Cowen & Company calls a "wholesale channel disruption (71% of Nike's North America sales) which for Nike could mean lower ASPs [average sale prices], declining sales and margin contraction," analysts led by John Kernan wrote in a Friday note.

On Friday, Finish Line Inc. (FINL) reported adjusted earnings per share (http://www.marketwatch.com/story/finish-lines-adjusted-profit-misses-expectations-shares-fall-2017-09-22) that fell below expectations, even after the athletic retailer gave a profit and sales warning on Aug. 28. Foot Locker Inc. (FL) , Dick's Sporting Goods Inc. (DKS) and other retailers are facing a promotional environment that's putting pressure on some of the best known names in the athletic space.

Nike has already announced a direct-to-consumer strategy (http://www.marketwatch.com/story/foot-locker-shares-plunge-26-as-brands-like-nike-and-adidas-go-direct-to-consumer-2017-08-18) that will focus on its own selling channels. But there are other forces in the space taking a toll on the company.

See also:Nike, Foot Locker, Finish Line downgrades highlight struggles in the sporting goods sector (http://www.marketwatch.com/story/nike-foot-locker-finish-line-downgrades-highlight-struggles-in-the-sporting-goods-sector-2017-08-21)

"We continue to see risk surrounding Nike's basketball business as price deflation in the category increases," Cowen wrote.

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