Can Nike Recover in the Current Fiscal Year?

Before the highly awaited Olympics 2016, Nike Incorporated forecasted a strong recovery of sales in the second quarter of the year.

The American multinational corporation which is mainly engaged with footwear and apparel expected rebound of sales in North America  after its expansion of the basketball and clearing excess brand.

Brand chief Trevor Edwards admitted that the company faced a supply chain challenges last year, but the full-price channels in North America are now clean. He added that the brand remains incredibly strong in North America and we expect growth will accelerate in this geography over the balance of the fiscal year.

Nike dealt with its weakest performance in the market during the fourth fiscal quarter as the competition against Adidas and Under Armour became tighter. The recorded slump of the company marked the worst ever sales of the company in the last six years.

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Meanwhile, as the Olympics approached, Mr. Edwards hoped for a good number of sales. Adding to this, the footwear juggernaut was also looking at a big possibility that sales would go up from the present quarter until May 2017 after the transfer of the excess stock. Currently, the company generates half of its revenue in North America.

In the first half of 2016, the shares of the stock on its footwear segment plummeted around 53.3 percent compared to the 6.3 percent surge of Adidas.

Market research company NPD explained that Nike did not keep their basketball offerings updated enough and at the same time we went through a fashion shift away from basketball as the preferred fashion shoe in the United States, so it was a double whammy.

“My gut is that this is a very temporary soft patch for them. They can reverse that trend pretty quickly” a representative of the research company added.

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The sales  of Nike was also sliced by the prominence of Golden State Warriors star player Stephen Curry who carried the brand Under Armour. Other celebrities moved from Nike to Adidas which added to the struggle of the company to maintain the dominance in the footwear sector.

However, Mr. Edwards has remained optimistic on the sponsorship deals of the company. He bragged about the key endorsers of the Nike which includes Lebron James and around 8,000 athletes  around the globe.

Further, Edwards revealed that the company was still planning to develop its influence in the basketball business sector. In addition to, the company prepares for the biggest sponsorship in the National Basketball Association as the company believes that basketball runs deep at Nike.

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Recently, the shares of Nike Incorporated remained flat to $57.77 with a market capitalization of $97.36 billion. The Oregon based company has a dividend yield of 1.11 percent and a price earnings ratio of 26.78. It has a 200-day moving average of $60.15 and a 50-day moving average of $55.65.

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Author: exocapitalfinancepro

As the dissemination of online financial news gets easier through the evolution of different media platforms, Exo Capital Finance Pro brings the most comprehensive up-to-date financial information right in front of your eyes. In line with the mission of Exo Capital Market, this news blog aims to provide the financial ideas needed by the clients through the market news and analysis delivered regularly. Exo Capital Mission Grounded on financial stability and service efficiency, Exo Capital Markets Ltd. hopes to stimulate and drive innovation in the world by catering the needs of its clients. Committed to guiding its clients to achieve their maximum potentials, the company seeks to lead and bring growth into the market through the high quality services it provides. Exo Capital Vision Exo Capital Markets Ltd. strives to become the leading financial services firm by offering its clients with the most modern solutions in the industry. The company wants to create an avenue of knowledgeable and competent traders by assuring accountability and honesty in delivering the services we provide for the community.

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