The so-called sneaker recession has hit companies like Nike (NYSE:$NKE) and Under Armor (NYSE:$UAA) hard. The reasons for the recession are cited as strong competition from Adidas (OTCMKTS:ADDYY) as well as dwindling sales at Foot Locker (NYSE:FL). Despite these problems, the stock still rose 6% this year.
Adidas, despite the recession, has continued to show steady growth. The company’s focus on expanding into different styles over heavy promotion has kept its stock strong throughout the under-performing sales of Nike.
In response, Nike has looked to broaden their horizons by selling its shoes online and getting its products included at Kohl’s (NYSE:$KSS). Wider distribution, however, won’t remedy stagnate innovation and a lack of interest in their products.
The stock has shown a downward trend over the last few years. It peaked in November, 2015 at $67, but recently experienced a 20% drop, selling at $54. This correlated with a drop of sales growth from 10% to 4.4% in this year alone. This slowdown is attributed to a failure to innovate and an increased focus on promotional activity. Analysts have reported that patience may be running thin and investors may be beginning to panic.
While Nike has experienced a 0.2% growth today, selling at $53.99, their primary competition Adidas has sunk 0.4% but is selling at $117.71. Meanwhile, Nike seller Foot Locker has increased 0.7% to $37.14, while Finish Line (NASDAQ:$FINL) has dropped 4.6% to $10.01.
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