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Strategy For Athletic Apparel Giants: Don't Split

Strategy For Athletic Apparel Giants: Don't Split

For athletic apparel companies, here's a strategy: Don't split. Several of the world's biggest apparel companies have split their stocks in the past year and have subsequently not performed well since.

Take Nike Inc (NYSE: NKE), which did a two-for-one stock split in late December of 2015. Since the company split, it is down over 18 percent with fears that Nike is experiencing slowed growth from increasing competition.

Skechers USA Inc (NYSE: SKX) at one point was one of the best performing stocks of 2015. The company surprisingly became the No. 2 shoe seller in the country at one point, then the stock did a three-for-one split in October 2015. It has dropped over 46 percent since.

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Under Armour Inc (NYSE: UA) had experienced quite the run up before its two-for-one stock split in April of 2016. Since then, its stock has steadily trended downward, more than an 11 percent decline.

Conversely, adidas AG (ADR) (OTC: ADDYY), which has not split its stock, is up over 76 percent year-to-date.

Puma SE NPV (OTC: PMMAF) and VF Corp (NYSE: VFC) have also not split; the former is up over 19 percent year-to-date, but the latter is down over 12 percent this calendar year.

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