Nike’s 10% Slide Drags Lululemon, On, Under Armour and Deckers Lower
Updated
Updated · Yahoo Finance · Oct 2
Nike’s 10% Slide Drags Lululemon, On, Under Armour and Deckers Lower
3 articles · Updated · Yahoo Finance · Oct 2
Summary
Premarket losses hit Lululemon, On, Under Armour and Deckers on Friday after Nike posted a weak quarter and issued full-year guidance well below analyst estimates.
Nike CEO Elliott Hill said sportswear demand will stay weak in the medium term, with discounting of slow-moving products and excess inventory likely pressuring pricing across the sector.
Nike’s own numbers deepened the alarm: Nike Brand sales fell 4%, online sales dropped 13%, Converse revenue sank 28% and China sales tumbled 26%; the company also flagged fresh major layoffs.
Nearly half of quarterly revenue came from Nike Sportswear, where sales fell low double digits after Dunk revenue was cut by almost 50%, creating a roughly $200 million headwind and hurting future wholesale orders.
The selloff suggests investors fear Nike’s problems are not isolated, but a sign of broader weakness and inventory strain across sportswear makers.
As Nike slashes inventory and triggers a sector-wide selloff, is the sportswear giant's aggressive discounting a brilliant turnaround or a desperate final play?
With China sales plunging and dividends exceeding cash flow, can Nike's booming running division actually save the brand from its multi-year downward spiral?
Will Nike's drastic move to cut Dunk sales by half revive its lost sneakerhead hype, or permanently destroy its core streetwear dominance?