Nike (NKE) - Get Report shares ran 2% Wednesday to $52.59 following news it would sell stuff directly on Amazon, although the name had recently sold off after announcing news to streamline the company (though labor force reduction) and suffering through having seen profit estimates lowered at Cowen. Stepping back, this name has been trending lower since mid-March, when the firm simultaneously reported withering profit margins and rising inventories.
Now take a look at Nike's performance Wednesday as a member of what one would consider to be its business community. The consumer discretionary sector actually closed slightly higher on the day, while multi-line retailers sold off again, and specialty retailers took an even nastier hit. More specifically, retail outlets that sell products manufactured by Nike were smashed. Foot Locker (FL) - Get Report took a 5% spanking, while Dick's Sporting Goods (DKS) - Get Report was hit in the teeth for 3.8%.
What does this mean to us trader types? Well, I sure am glad that we bought back Amazon shares early last week. The move by Nike seems aggressive, but intelligent. Does one just buy it here, if currently flat the name (we are flat the name)? It definitely puts the Nike name on our radar. It would help if we saw more young people sporting Nike gear locally instead of Adidas (ADDYY) . That would be an ultimate buy signal, even if not on a dip. As for competitor Under Armor (UAA) - Get Report we'll also stay away from that one for now. Exciting? Definitely. Compelling? No.
Nike's shares fell 0.3% to $52.45 on Thursday morning.
Visit here for the latest business headlines.
At the time of publication, Stephen Guilfoyle was long Amazon and flat Nike, although positions may change at any time.