Nike, Inc. (NKE) shares are taking a hit on Wednesday, potentially due to a ripple effect from the recent earnings reports of Foot Locker (FL) and Abercrombie & Fitch Company (ANF). Both companies saw their stock prices drop after releasing their financial results.
Foot Locker reported a loss of 5 cents per share for the second quarter of fiscal year 2024, which beat analyst estimates of a loss of 7 cents per share. The company also exceeded revenue expectations, reporting sales of $1.89 billion against an anticipated $1.88 billion. Despite the positive earnings beat, Foot Locker reaffirmed its adjusted EPS guidance of $1.50 to $1.70 for the full fiscal year. During the quarter, Foot Locker opened 5 new stores but closed 41 others. Additionally, the company remodeled or relocated 14 stores and updated 67 to meet current design standards.
Abercrombie & Fitch fared better, reporting sales of $1.13 billion, surpassing analyst estimates of $1.10 billion. The company’s adjusted EPS also beat expectations, coming in at $2.50 compared to the anticipated $2.22. Abercrombie is optimistic about its future performance, projecting low double-digit year-over-year growth in net sales for the third quarter. Fran Horowitz, CEO of Abercrombie, highlighted the company’s strong performance in the Americas, with a 23% increase in net sales year-over-year, building upon a 19% growth from the previous year. The EMEA region also saw continued strength with a 16% growth in net sales. Furthermore, Abercrombie brands achieved a 26% growth rate, while Hollister saw a sequential acceleration to 17% growth, benefiting from strong summer and back-to-school sales.
The performance of Foot Locker and Abercrombie & Fitch has had a spillover effect on other companies in the apparel and athletic wear sector, including Under Armour, Inc. (UA). Investors are closely watching these developments as they provide insights into the current state of the industry.
At the time of writing, Nike shares are down 3.31% at $82.47, according to data from Benzinga Pro. This decline underscores the impact that these recent earnings reports have had on the broader market.
