Shares of Nike (NYSE: NKE) fell as much as 5% early Wednesday, according to data provided by S&P Global Market Intelligence, then settled to trade down around 2.5% after Foot Locker announced disappointing quarterly results.
To be clear, there was no company-specific news causing Nike stock to decline today. Rather, it appears Nike is trading in sympathy with American sportswear and footwear retail giant Foot Locker. Shares of Foot Locker plummeted more than 30% early today after the company announced weak second-quarter 2023 results and suspended its dividend this morning.
Foot Locker warned that while its results were “broadly in line” with management’s expectations, it began to see softening retail trends and increasing price sensitivity from consumers in July. Naturally, this has spurred fears that such trends could extend to companies like Nike, which rely on their premium brand positioning and pricing power to drive top-line growth and maximize profits.
Investors still have some time to mull whether Foot Locker’s weakness is necessarily indicative of an impending disappointment from Nike, a globally diversified business that typically releases its own fiscal first-quarter results in late September.
In the meantime, however, Foot Locker is hardly the only retailer to voice concerns over current macroeconomic headwinds affecting consumer spending this earnings season. Given the gravity of Foot Locker’s sell-off today, it’s no surprise to see shares of Nike trading modestly down today.
10 stocks we like better than Nike
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now… and Nike wasn’t one of them! That’s right — they think these 10 stocks are even better buys.
*Stock Advisor returns as of August 21, 2023
Steve Symington has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nike. The Motley Fool recommends Foot Locker and recommends the following options: long January 2025 $47.50 calls on Nike. The Motley Fool has a disclosure policy.
—
Blog powered by G6
Disclaimer! A guest author has made this post. G6 has not checked the post. its content and attachments and under no circumstances will G6 be held responsible or liable in any way for any claims, damages, losses, expenses, costs or liabilities whatsoever (including, without limitation, any direct or indirect damages for loss of profits, business interruption or loss of information) resulting or arising directly or indirectly from your use of or inability to use this website or any websites linked to it, or from your reliance on the information and material on this website, even if the G6 has been advised of the possibility of such damages in advance.
For any inquiries, please contact [email protected]
