Is Nike's (NKE) good fortune rubbing off on others? Perhaps.
The athletic footwear and apparel giant knocked it out of the park in its earnings debut as a Dow component; with both its fiscal first-quarter revenue and earnings per share beating expectations. Granted, China remained a drag. But there was strong sales growth in North America and Western Europe amid rising demand for athletic apparel. Also impressive was an 8% gain in Nike brand future orders — an indicator of future sales.
And in a note published today, Sterne Agee analyst Sam Poser argues that those results – particularly Nike's gains in Europe — bode well for Foot Locker (FL). He writes:
Nike reported a double digit increase in European future orders which bodes well for FL. Nike called out specific strength in the UK, Germany, Austria, and Switzerland. The UK is the 2nd largest market for FL in Europe. Germany is also very important, given the recent acquisition of the German based Runners Point Group. Our checks indicate that FL is taking share in Italy from many smaller retailers who have gone out of business due to the poor economy. Nike noted that futures in Italy were down MSD, an improvement from down double digits in recent quarters. Nike’s 12% increase in NA futures also bodes well for FL.
At $33.84, shares of Foot Locker rose 3.3% in morning market action and Dick's Sporting Goods (DKS) rose almost 2% to $53.33.
Investors also bid up shares of Under Armour (UA) to $80.31, a 1.5% rise. And athletic-gear retailer Finish Line (FINL) jumped 7.3% to $24.02 following their own earnings homerun.
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