In the wake of Nike’s fourth-quarter financial results that left investors pleased, some analysts are taking a more cautious approach. While the sportswear giant saw an overall 5% increase in revenues, there seems to be a cause for concern regarding their performance in North America.
Canaccord Genuity analyst Camilo Lyon states that only 0.5% growth in North America reveals multiple issues for the brand in this region. He points to a lackluster product line, a heavily discounted e-commerce environment, and market saturation as key challenges. Furthermore, Lyon predicts that these problems will persist in the near future. Elevated inventory levels for Nike’s off-price clothing also contribute to hesitation about the company’s recovery. Therefore, Lyon only rates Nike’s stock at ‘Hold.’
Jay Sole, an analyst from Morgan Stanley, believes that the future of Nike’s stock relies on North America sales performances and the success of new product releases, including Air VaporMax. He rates the shares of Nike at ‘Equal Weight.’
Overall, while Nike shareholders may celebrate this recent victory, analysts urge caution regarding the company’s struggles in North America.