NEW YORK (TheStreet) -- Nike (NKE - Get Report) is leaving the golf equipment business as the company wants to focus on shoes, clothes and its partnerships with pro golfers, CNBC's Brian Sullivan reported on "Squawk Box" Thursday morning.
The sporting goods industry is struggling with golf, which is the smallest category for Nike. Nike's golf segment gained momentum in the 1990's due to the rise of Tiger Woods, Sullivan said.
Woods does have a long term relationship with Nike and will continue to be an ambassador for the brand, Woods' agent Mark Steinburg told CNBC.
"The only reason they got into the golf equipment business was because they had Tiger Woods. The only reason they're getting out of the golf equipment business is because Tiger Woods is no longer playing like the Tiger Woods we all know," CNBC's Scott Wapner reported on "Power Lunch" this afternoon.
Nike's golf revenue dropped 8% year over year from $769 million to $706 million.
Tiger's apparel and footwear will remain with Nike, but the golf clubs he uses will change when he returns to competitions, NBC Golf Channel's Will Gray said citing Steinburg.
Rory Mcilroy signed a $200 million deal with Nike in January 2013 and uses all of Nike's clubs. Other golf stars such as Tony Finau and Jhonattan Vegas both won PGA tournaments using Nike golf clubs, Gray said.
"They don't sell clubs. Nike didn't sell nearly as many clubs as they wanted to, even probably with Tiger, but none of these other athletes sell the way Tiger sold. You wanted to look like Tiger on the golf course," Wapner said.
Nike's sales peaked in 2013 with a $800 million revenue, which was Tiger Woods' last best year, Gray added.
Shares of Nike closed higher today.
Separately, TheStreet Ratings team set this stock as a "buy" with a ratings score of B+. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income.
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: NKE