TODAY ONLY - 4x your impact with a Giving Tuesday match! MATCH MY GIFT

Nike’s future concerns analysts

Dan Gorenstein Sep 27, 2016
HTML EMBED:
COPY
One analyst says that Nike's problem is its focus on basketball shoes. Doug Pensinger/Getty Images

Nike’s future concerns analysts

Dan Gorenstein Sep 27, 2016
One analyst says that Nike's problem is its focus on basketball shoes. Doug Pensinger/Getty Images
HTML EMBED:
COPY

Caution and low expectations: that’s how several analysts are talking about Nike before the company comes out with its first quarter earnings report later today.

Athletic footwear is a $35 billion industry, and as our taste in footwear changes, Wall Street expects earnings to be down for the shoe king.

Nike’s strength — its basketball line highlighting the NBA’s incandescent stars and their signature shoes — have helped make it rain for years.

But NPD analyst Matt Powell said the allure of the latest LeBron and Kevin Durant sneakers is gone.

“We’re very much in a retro fashion cycle today,” he said. “Millennials are really flocking to wearing old-school looks.”

Like those green and white Adidas Stan Smith throwbacks, which Steve Weiss at Short Hill Capital Partners says are flying off the shelves.

Weiss said Nike’s problem is its focus on the basketball shoe.

“I couldn’t wear [basketball shoes] to a meeting. It’s not as accepted,” he said. “Whereas a black sneaker with a white sole, Prada makes shoes like that. Every upscale manufacture is making that.”

Weiss said Nike’s got to start pushing casual shoes that can pass at the office, at least as long as this fad lasts.

As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.

Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.

Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.