How Would Nike Gain from a Direct Partnership with Amazon?
The move would directly connect Nike with its Amazon customers, which had been served by third-party dealers—until now.
A direct partnership between Nike and Amazon would mean an increase in competition for brick-and-mortar sporting goods retailers.
Share prices of specialty athletic retailers Foot Locker, Dick’s, and Finish Line fell on June 21 after an announcement that Nike might sell products directly on Amazon.
The grocery business already has stiff competition and offers very narrow margins, but now Amazon (AMZN) is throwing its hat into the ring.
Foot Locker stock is trading at $55.10, which is ~44% below its 52-week high price. Wall Street analysts expect its stock price to rise to $72.60.
Foot Locker reported its results for 1Q17 on May 19, 2017. It missed analysts’ revenue and earnings estimates. Foot Locker’s EPS fell 2.2% YoY to $1.36.
On June 12, 2017, Argus Research downgraded Foot Locker (FL) to a “hold” from a “buy” rating due to its deteriorating outlook and reliance on Nike.
Signet Jewelers (SIG) had a slow start to the current fiscal year, as continued retail headwinds, lower spending on jewelry, and company-specific challenges resulted in falling sales.
Signet’s (SIG) margins have been hampered by lower sales and increased promotions.
Despite a dismal performance recently, the majority of analysts covering Signet Jewelers (SIG) remain neutral on the stock.
Signet Jewelers (SIG) had a soft start to the current fiscal year with a negative earnings surprise in fiscal 1Q18.
On a year-to-date basis, Signet stock has fallen ~43% as of June 6, 2017, making it one of the worst performers among S&P 500 (SPX) stocks.
As of May 26, 2017, 14 of the 24 analysts (58.0%) covering Ulta Beauty (ULTA) have given the stock a “buy” rating. Ten have given it a “hold.”
The stock of beauty retailer Ulta Beauty (ULTA) rose 3.2% to $302.40 on May 26, 2017, in reaction to its fiscal 1Q17 results and upgraded outlook for fiscal 2017.
Sales for Ulta Beauty (ULTA) rose 22.5% to $1.31 billion in fiscal 1Q17. It exceeded the consensus Wall Street analysts’ sales estimate of $1.28 billion.
Ulta Beauty’s operating margin increased 60 basis points on a year-over-year basis to 14.3% in fiscal 1Q17.
Ulta Beauty (ULTA) announced its fiscal 1Q17 results after the financial markets closed on May 25, 2017. It delivered an impressive performance.
Best Buy’s valuation multiple rose 16.5% on May 25 in reaction to its fiscal 1Q18 results and a better outlook.
As of May 25, 16 of the 27 (59%) analysts covering BBY had a “hold” recommendation on the stock. Eight analysts had a “buy” recommendation.
Best Buy’s (BBY) gross and operating margins contracted in fiscal 1Q18 (ended on April 29, 2017), despite the company’s higher revenues.