
da-kuk
The apparel and footwear sectors are active after both Nike (NYSE:NKE) and Lululemon Athletica (NASDAQ:LULU) reported earnings late on Thursday. Meanwhile Nike (NKE) warned of a short-term revenue dip as the company shifted its focus to innovation, Lululemon’s (LULU) revenue and profit guidance warning was even more stark. Both athletic apparel giants warned on sluggish demand trends in certain categories.
Stocks react negatively to the earnings double-whammy including Allbirds (BIRD) -3.3%Deckers Outdoor (DECK) -2.5%On Holding AG (ONON) -2.3%Wolverine World Wide (WWW) -2.4%Under Armor (UAA) -2.2%Skechers (SKX) -1.8%and Birkenstock (BIRK) -1.5%.
During Nike’s earnings call, management underlined a commitment to wholesale partners after an admission that the focus on the direct-to-consumer sales channel went too far.
“We’re increasing our investment in wholesale to help us elevate and grow the entire marketplace. We recognize that our wholesale partners help us scale our innovation and newness in physical stores and connect our brands in the path of the consumer.”
That tidbit helped push ups Foot Locker (NYSE:FL) +5.0%Sportsman’s Warehouse (SPWH) +2.4%, and Hibbett (HIBB) +2.4%but Dick’s Sporting Goods (DKS) -2.2% and Big 5 Sporting Goods Corp. (BGFV) -2.0% sat out the sporting goods retailer rally.
Nike (NKE) showed a 8.6% drop in early Friday trading, while Lululemon (LULU) slides 17.0% lower. The two stocks were the biggest decliners in the S&P 500 Index.