Nike Inc (NYSE:NKE) has made less progress than expected in rightsizing its sportswear business, prompting KeyBanc Capital Markets to downgrade the stock as competition in athletic apparel and footwear intensifies.
Consumers seem to be much less brand-agnostic than they were earlier, with disruptor brands continuing to gain market share, analyst Ashley Owens stated.
This has likely made Nike’s path to recovery longer and "elongated marketplace cleanup actions," he added.
Check out other analyst stock ratings.
Nike ‘Win Now’ Not Evident In China, EMEA
The company’s "Win Now" initiatives remain in place, but efforts to right-size sportswear and pressure in Greater China "have not been addressed as quickly as we initially expected," Owens said.
There has also been a reversal in trends in the EMEA (Europe, the Middle East, and Africa) region, which raises additional concerns, she added.
Change In Leadership
CFO Matthew Friend will be replaced in August with former Pfizer Inc (NYSE:PFE) CFO David Denton.
"We believe that with a fresh lens in place, this could drive incremental cleanup actions that are currently not contemplated, further elongating the recovery timeline and warranting a potential delay of the Investor Day slated for this fall," she wrote.
Stock Valuation: Nike’s stock continues to trade at a premium to the broader apparel group despite the ongoing pressures in the company’s global markets, the analyst noted.
NKE Price Action: Shares of Nike had risen by 0.54% to $96.82 at the time of publication on Friday.
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