Nike (NYSE: NKE) has thus far navigated this downturn exquisitely. It has maintained sales overseas, in particular in Asia. Nike's legendary supply-chain mastery and inventory management skills have likewise served it very well. So it was a shock when the shoe giant announced Wednesday that future orders had dropped by 12%, according to Bloomberg. Bummed out investors bid down Nike share's by nearly 5% in after-hours trading.
Granted, Nike faced difficult comps. During the Beijing Olympic Games last summer Nike togs were selling like hotcakes around the globe. And a chunk of the reduction in order value came due to currency fluctuations. But it's hard to deny that this quarterly earnings announcement was a bleak reminder that the "green shoots" may be more of a Washington creation than a reality in the global economy.
Whether you buy a share of Nike or not in the next few weeks, as the stock will likely continue to remain weakened, really depends on what you think of the global consumer. If you think those consumers are going to bounce back strongly, then Nike is a good solid play. If not, you might end up with your money locked up in a stock that won't move for quite a while. Nike has killer management and remains the best-run apparel company in the Universe. But even the winged goddess of victory struggles to vanquish the biggest asset bubble in history.
Alex Salkever is the Director of Research at Piqqem.com, a stock prediction community powered by the Wisdom of Crowds.
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Reader Comments (Page 1 of 1)
6-25-2009 @ 7:38PM
Jack said...
Not only do kids do not have money to pay for $150 to 175 dollar shoes. But outlet stores such as Eastbay, who offers 30% sells off of all products "Except Nike Shoes" is price fixing too. Nike, stop taking advantage of your customers, or you will be the next Mortgage crisis.
8-22-2009 @ 1:22AM
nch said...
I don't think Timberland is a world-wild Brand? It is only popular in U.S! Pity for American treasure!