Sporting goods and shoe retailer stocks plummet
Share prices of specialty athletic retailers Foot Locker (FL), Dick’s Sporting Goods (DKS), and Finish Line (FINL) plunged on Wednesday, June 21, 2017, after a Goldman Sachs analyst said that Nike (NKE) might choose to sell its products on Amazon.com (AMZN) directly.
FL, DKS, and FINL fell 5%, 3.8%, and 4% respectively, while Nike gained 2% during the day.
More on the speculated partnership between Nike and Amazon
Goldman Sachs analyst Lindsay Drucker Mann said in a customer note that world’s largest sportswear manufacturer Nike could start selling its products directly to consumers through the online juggernaut Amazon.
Currently, Nike’s products are sold on Amazon.com through third-party dealers and licensees. They are also available on Amazon’s subsidiary Zappos.com, but not directly on Amazon.
According to Mann, checks indicate that Nike could now become a wholesale dealer on Amazon, which would add additional $300 million to $500 million to its top line.
Nike’s move increases competition for brick-and-mortar sporting goods retailers, who sell Nike’s products through their retail stores. Nike’s products account for more than two-thirds of Foot Locker’s sales.
ETF investors seeking to add exposure to NKE can consider the ProShares Ultra Consumer Goods ETF (UGE), which invests 2.5% of its portfolio in NKE.