Why This Analyst Says Nike Can Regain Momentum in China

Nike could show further recovery in China when it reports earnings for the first quarter, according to a recent note from UBS analyst Jay Sole. In its fourth quarter results, reported last month, Nike’s Greater China revenue grew 25 percent. In a call with investors, Nike CEO and president John Donahoe said the company would continue to invest in the region with innovations and hyper-local activations. “Nike remains the No. 1 brand in China and brand momentum is improving,” wrote Sole in a Tuesday note, following a meeting with management. “Nike is further poised to rebound given clean inventory, a full innovation pipeline, and IT investments now in place.” Nike said it had a record-breaking performance during the 6/18 shopping holiday in China, and was the No.1 sports brand on Tmall, Alibaba’s China e-commerce service. Nike is also seeing returns, particularly among Gen Z, from its focus on combining innovation with local storytelling. Nike CFO Matthew Friend said that in the fourth quarter, Nike saw its highest levels of full-price selling in the region in eight quarters. “Innovation is very important in China and Nike believes its new products will help,” wrote Sole. “Nike continues to leverage local insights to make more local

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