Promotional Environment Woes Threaten Nike and Lululemon Stocks
Dick's Sporting Goods and JD Sports have warned of a promotional environment in the athletic footwear and apparel space, causing concerns for Nike and Lululemon Athletica.
The companies' warnings are based on their own experiences, with Dick's shares collapsing after its fiscal second-quarter earnings report. JD Sports also cited economic and footwear-product-cycle headwinds.
Nike is already struggling, having lost share to local brands in China, its former strongest market, and facing challenges in North America. The company has been trying to reestablish itself as a premium brand, but the more promotional environment may add to its woes.
Lululemon Athletica also faces difficulties, including product missteps and increased competition from newer high-end brands like Alo and Vuori. The company's recent hire of veteran Nike executive Heidi O'Neill has been met with disappointment from investors.