Global investment bank Jefferies has decided that Nike stock is in trouble, and Wall Street says adidas is to blame. Advisors have gone so far as to downgrade Nike stock to ‘hold’, basically saying it’s not safe to buy. The announcement saw Swoosh shares drop three per cent, adding to woes that analysts say are caused by Foot Locker’s low second-quarter earnings report and Nike’s apparent inability to lure web traffic.
And how is adidas doing? By all accounts they’re thriving. In addition to crushing their last financial quarter, adidas has nabbed 44 per cent of Nike’s sneaker market share, The Street reports.
But keep in mind that stocks are fickle. And despite sentiments towards adidas improving markedly, and Mark Parker taking a huge pay cut, Nike is an industry giant for a reason – and in many regards they're still leagues ahead of the competition. Financial authorities like The Street have gone so far as to say that Nike are floundering because of a weak back catalogue – even calling adidas ‘the king of the retro sneaker’. Now adidas do have some old school heaters, but saying Nike is lacking a strong retro line is crazy ignorant.
Numbers don't lie though, and – for now, at least – they’re suggesting that Nike is in hot water.