We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Nike May Start Selling Directly to Amazon, Sports Retail Stocks Decline
Read MoreHide Full Article
On Wednesday morning, Goldman Sachs analyst Lindsay Drucker Mann said Nike, Inc. (NKE - Free Report) is close to selling directly through Amazon.com (AMZN - Free Report) , citing channel checks. Nike stock rose 1% as shares of Amazon gained 0.30% in morning trading.
This announcement has already negatively affected popular athletic retail chains as this move by Nike raises their competition with Amazon. So far today, Foot Locker, Inc. (FL - Free Report) and Dicks Sporting Goods, Inc. (DKS - Free Report) are down 6% each. Shares of Hibbett Sports have also lost 6% and Finish Line, Inc. lost 4% in late morning trading.
Dick’s Sporting Goods fell as much as 8% in early morning trading, hitting an almost one-and-a-half-year low, while Hibbett Sports fell as much as 6% to a more than seven-year low.
Currently, Nike sells on Amazon-subsidiary Zappos, but only sells on Amazon through unlicensed third-party resellers. Selling directly through Amazon will allow Nike to limit discounted inventory by third-party sellers and push full-price products.
Nike’s shift to selling directly on Amazon’s Marketplace could see a 100 basis points increase. Mann said this could amount to $0.6-1 billion in retail sales globally. The company’s stock has been the worst performer among Dow stocks over the last three months.
“Taking this step would give NKE direct economic exposure to a large and fast growing distribution channel, while improving the brand presence and expanding access to Millennial shoppers,” Mann said in a client note.
Nike follows the lead of popular athletic wear company Under Armour Inc. (UAA - Free Report) , which already sells directly on its own, customized page on Amazon. Licensed third-party sellers also sell the company’s products on Amazon Marketplace. This arrangement has allowed Under Armour to release its newest merchandise before Nike.
Mann also said this could affect the selling strategies of other sportswear companies. “NKE’s move could inspire other wholesale brand, many of which have so far resisted a partnership with Amazon.com, to directly engage.”
So far, the announcement hasn’t had as big of an impact on other sportswear companies’ stock. Under Armour and Adidas AG (ADDYY - Free Report) are both down 1%, while Puma SE was up 0.05% in morning trading.
Zacks’ Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but chosen members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting today, and for the next month, you can follow all Zacks’ private buys and sells in real time. Our experts cover all kinds of trades: value, momentum, ETFs, stocks under $10, stocks that corporate insiders are buying up, and companies that are about to report positive earnings surprises. You can even look inside portfolios so exclusive that they are normally closed to new investors. Click here for Zacks’ secret trades>>
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report predicting the 7 stocks that will soar highest in the coming month.
Image: Bigstock
Nike May Start Selling Directly to Amazon, Sports Retail Stocks Decline
On Wednesday morning, Goldman Sachs analyst Lindsay Drucker Mann said Nike, Inc. (NKE - Free Report) is close to selling directly through Amazon.com (AMZN - Free Report) , citing channel checks. Nike stock rose 1% as shares of Amazon gained 0.30% in morning trading.
This announcement has already negatively affected popular athletic retail chains as this move by Nike raises their competition with Amazon. So far today, Foot Locker, Inc. (FL - Free Report) and Dicks Sporting Goods, Inc. (DKS - Free Report) are down 6% each. Shares of Hibbett Sports have also lost 6% and Finish Line, Inc. lost 4% in late morning trading.
Dick’s Sporting Goods fell as much as 8% in early morning trading, hitting an almost one-and-a-half-year low, while Hibbett Sports fell as much as 6% to a more than seven-year low.
Currently, Nike sells on Amazon-subsidiary Zappos, but only sells on Amazon through unlicensed third-party resellers. Selling directly through Amazon will allow Nike to limit discounted inventory by third-party sellers and push full-price products.
Nike’s shift to selling directly on Amazon’s Marketplace could see a 100 basis points increase. Mann said this could amount to $0.6-1 billion in retail sales globally. The company’s stock has been the worst performer among Dow stocks over the last three months.
“Taking this step would give NKE direct economic exposure to a large and fast growing distribution channel, while improving the brand presence and expanding access to Millennial shoppers,” Mann said in a client note.
Nike follows the lead of popular athletic wear company Under Armour Inc. (UAA - Free Report) , which already sells directly on its own, customized page on Amazon. Licensed third-party sellers also sell the company’s products on Amazon Marketplace. This arrangement has allowed Under Armour to release its newest merchandise before Nike.
Mann also said this could affect the selling strategies of other sportswear companies. “NKE’s move could inspire other wholesale brand, many of which have so far resisted a partnership with Amazon.com, to directly engage.”
So far, the announcement hasn’t had as big of an impact on other sportswear companies’ stock. Under Armour and Adidas AG (ADDYY - Free Report) are both down 1%, while Puma SE was up 0.05% in morning trading.
Zacks’ Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but chosen members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting today, and for the next month, you can follow all Zacks’ private buys and sells in real time. Our experts cover all kinds of trades: value, momentum, ETFs, stocks under $10, stocks that corporate insiders are buying up, and companies that are about to report positive earnings surprises. You can even look inside portfolios so exclusive that they are normally closed to new investors. Click here for Zacks’ secret trades>>