Increasing competition and lost business were clearly visible in Nike’s recent earnings. The company released its earnings in late September. Although the apparel giant cruised ahead on both the top and bottom line estimates, the real picture was not as rosy.
Nike’s bottom line success was more a result of a one-time tax benefit. The company reported sluggishness in future orders. The orders grew by 7% (constant currency)—compared to 11% growth in the last quarter. The orders impacted North America the most—it’s Nike’s biggest market. Futures orders only grew 1%—compared to analysts’ estimate of 5% growth. The inventory rose 11%, while demand creation expenses rose 25%.
ETF investors seeking to add exposure to Nike can consider the SPDR Consumer Discretionary Select Sector ETF (XLY). XLY invests 3.1% of its portfolio in Nike.
View more information: https://marketrealist.com/2016/10/whos-taking-bite-nikes-market-share/