Nike, the largest provider
of sporting gear in the world has slid the most in the last couple of quarters
after orders has failed to measure up to analysts' forecasts, mainly because of
the slow demand from emerging markets.
A primary factor which contributed in the fairly
high expectations is the good performance of Nike shares in the previous year.
According to Cheyney Group Marketing's statement, orders for Nike gear have
previously been on an upward trend, hence the 11% gain that was predicted by
analysts. As they say, when you're already in such a high place, it's not
enough to just rest on your laurels -- you have to plan how to surpass your own
records.
In Nike's biggest market alone, orders increased
by 13%, but still slightly under the 13.1% forecast while in Europe, they also
rose by 13% but significantly lower than the 15% estimate. Moreover, orders
coming from other markets only rose by 1% compared to the 7% estimate.
Not only did the NKE shares slide as much as
four percent but also those of retailers that offer its products such as Finish
Line and Foot Locker.
Meanwhile, net income on the last quarter
increased by 23% or 70 cents per stock which just about fulfilled the
prediction of Cheyney Group
Marketing analysts. On the good side though, its revenue has increased by a
whopping 15% while beating forecasts of analysts.
Such orders were observed closely for most
investors see them as a foreshadowing of how the brand will sell in the future.
Though NKE shares did drop because of last
week's unfavorable results, they increased fairly well on the first quarter of
2014 as the brand's athletic wear finds its way into mainstream fashion and
casual outfits through the "athleisure" trend.
Meanwhile, Nike's close rival, Adidas, has
consistently exceeded expectations of analysts by posting favorable profit and sales
numbers -- perhaps owing to the fact that it has reduced its profit estimate
due to weak demand in sports gear.
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