Market Overview

Recent Selloff In Shoe Stocks No Reason To Panic, Report Says

  • Shares of Nike Inc (NYSE: NKE) and Under Armour Inc (NYSE: UA) are down 6 percent and 9 percent, respectively, in the last one month, while Skechers USA Inc shares (NYSE: SKX) are up 1 percent.
  • Sterne Agee CRT’s Sam Poser maintained Buy ratings on all three companies.
  • The weekly shift in the Jordan launch is no reason to panic and that basketball business remains healthy, Poser stated.

Analyst Sam Poser mentioned that the recent negative movement in share prices of athletic retailers, following the release of SportScanInfo weekly basketball data, appears unwarranted. He added that although basketball sales were down 8 percent in the week, largely due to the timing shift of a Jordan launch, the basketball business remains healthy, up 15.4 percent so far in December.

Poser believes that any weakness in the stocks of athletic retailers offers a good buying opportunity. On a month-to-date basis, Jordan basketball sales are up 23 percent, while Nike basketball sales are down 13.4 percent and Under Armour basketball sales grew 100 percent.

“This year's launch schedule in December is more potent than last year, with sales up 45%. In addition, we contend that the pipeline continues to be robust heading into January, with the launch of the Kyrie 2 in early January,” the Sterne Agee CRT report stated.

Poser believes that the national mall-based athletic specialty retailers will benefit most from the basketball strength. Investors should watch out for the SSI data for the total month of December, which will balance out all the launch timing shifts and will come out on January 7, 2016.

Skechers USA

Poser mentioned that Skechers’ sales remain robust. The company’s total sales last week rose by 28.5 percent, with ASPs up 4 percent. The Casual Athletic category, constituting a third of the company’s business increased 18.7 percent, driven by Afterburn, Synergy and Relaxed Fit. The Utility category, constituting just under 25 percent of the company’s total sales, grew 130 percent during the last week.

“We have been hearing a good deal of chatter regarding the strength, or the lack thereof, of the Skechers' Star Wars product. We have been of the view and continue to be of the view that the Skechers' Star Wars product is icing, not the cake,” Poser wrote.

Latest Ratings for NKE

Jun 2019MaintainsNeutral
Apr 2019ReinstatesBuy
Mar 2019MaintainsMarket PerformMarket Perform

View More Analyst Ratings for NKE
View the Latest Analyst Ratings

Posted-In: Sam Poser Sterne Agee CRTAnalyst Color Long Ideas Reiteration Analyst Ratings Trading Ideas


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