Editor’s Note: Welcome to a daily column we run here at BroBible breaking down the day’s biggest stories in sports finance with commentary from the equities analyst and sports fanatic perspectives. It comes to us via our friends at JohnWallStreet, publisher of a free e-mail newsletter focused on sports related public equities and their subsidiaries. You can sign up here.
NIKE TO OPEN 5,000 “PANTS STUDIOS” AS IT LOOKS TO GROW WOMEN’S BUSINESS
In supplemental documents distributed at Nike’s (NKE) investor day, the brand provided a game plan for how they plan to cash in on the young, affluent, active female demographic; “pants studios” and “sneaker boutiques”. On November 1st, NKE will open the first of 5,000 “pants studios”; dedicated space within their stores to showcase pants, organized by sport or activity. The company has been pouring R&D dollars into the female demographic, even vowing to rethink athleisure pants beyond tights; and for good reason, women’s athleisure is a $7 billion industry that they see growing.
Howie Long-Short: Lululemon (LULU) has competitors coming from all directions. Amazon (AMZN) is creating private label sportswear lines using LULU manufacturers and now NKE is introducing 5,000 “pants studios”. While LULU CEO Laurent Potdevin can argue AMZN is playing in a “very different playground” (I would debate that), there is no doubt NKE is going after LULU’s target clientele. As NKE President Trevor Edwards stated earlier this week, “our growth in our women’s business is outpacing our men’s business, and it will continue to do so”. Unfortunately for LULU shareholders, that growth looks like it will come at your expense.
Fan Marino: Nike’s revamped strategy for women’s sneaker sales (i.e. sneaker boutiques), focuses on the premium and sub-$100 categories. The company has reported sales are up 30-50%, at stores running the “sneaker boutique” pilot program.
Note: The summary for this story was written by our friends at The Water Coolest. Check out TheWaterCoolest.com for the latest market news and professional advice.
HARLEY DAVIDSON REPORTS DECLINING SALES AND PROFITS, BACKS FULL YEAR SHIPMENT FORECAST
Harley Davidson (HOG) reported Q3 earnings that beat analyst predictions and the company announced it will meet full year shipment forecasts, despite lagging sales and net income that declined from $114.1 million to $68.2 million YOY. HOG reported U.S. retail sales declined 8.1% for the quarter, with total global sales down 6.9% from Q3 ‘16. Moving forward the company hopes that a price increase on some of their bikes, favorable foreign exchange rates and more models to choose from, will lead to improved profits.
Howie Long-Short: Harley’s core audience is aging. They’re not buying new bikes and they’re flooding the resale market with used ones. The younger demographic is scooping up bargains on the resale market or opting for lower-margin models. Harley can’t solve those problems and they have no control over exchange rates, but they are doing a good job controlling what they can. The company is introducing 17 new models in 2018, 9 of which are under $12,000. They’re giving the consumer what they want!
Fan Marino: Millennial motorcycle enthusiasts aren’t the only ones opting to save where they can. NBA star LeBron James readily admits to being thrifty. Despite an estimated net worth of $400 million, James was recently quoted as saying “I’m not turning on data roaming, I’m not buying no apps, I still got Pandora with commercials.” With that attitude, James is certain to avoid lists like Time Inc.’s “10 Insanely Rich Athletes Humbled By Financial Ruin”.
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LOUISVILLE SLUGGER OUTFITS WORLD SERIES STARS
If you watched either of the first two games of the World Series, you may have noticed a unique flame tempered bat in the hands of Dodgers OF Kike Hernandez or 2B Logan Forsythe. Those bats, manufactured by Louisville Slugger (OTC: AGPDF), are made from northern white ash timber; with a Bernzomatic (WOR) blowtorch used to create the flame tempered design. Hernandez and Forsythe aren’t the only Dodgers (or Astros) players using Louisville Slugger bats though, as 11 others placed orders with the company prior to the start of the World Series. With 40 popular models to choose from, 3 different types of wood (rock maple and birch are the others) and 7 MLB approved colors/designs; Louisville Slugger can customize bats to the specific needs/taste of a player, ensuring he has utmost confidence when stepping to the plate.
Howie Long-Short: Louisville Slugger is owned by Wilson Sporting Goods Co., a subsidiary of Amer Sports Corporation (AGPDF). AGPDF issued Q3 earnings, reporting net sales were up 3% YOY (to $733.2 million EUR). Solid growth was reported in both EMEA and China, while the U.S. market remains a challenge for the company. Bernzomatic is owned by Worthington Industries (WOR), an S&P 400, global diversified metals manufacturing company. WOR is off to a strong fiscal ’18, reporting Q1 ‘18 net sales were up 15% YOY (to $848.2 million). The company will next report on December 18th.
Fan Marino: The Astros’ wild 11 inning Game 2 win, means that the series is heading to Houston tied at 1 game apiece. Game 3 is tonight, with first pitch at 8:09 EST on Fox (FOXA). As for the TV ratings, Game 1 drew 11.53 million viewers (down 19% from last year). Game 2 drew nearly 15 million viewers, just a 3% decline from the 2016 Cubs-Indians World Series.
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JohnWallStreet is not a person or location, but a destination for the educated sports fan.
While we won’t be publishing “hot takes” on LeBron’s relative greatness to Jordan, we will be offering up the most relevant sports related finance news, in easily digestible bites, with commentary from both the equities analyst and sports fanatic perspectives.
We’ll cover publicly traded professional teams & stadiums, television networks, apparel & footwear companies, equipment companies, ticketing companies, content and facilities providers. If it trades on Wall Street, and has a sports angle, it’s in our wheel house.
Howie Long-Short and Fan Marino will be providing their expert opinions on each story. They have slightly different areas of expertise. Fan Marino is a firm believer that the SEC is the premier football conference. Howie Long-Short knows it as the Security & Exchange Commission. Fan Marino lives and dies with the college selection of 5 star, blue chip recruits. Howie Long-Short spends his days analyzing blue chip stocks. Howie Long-Short knows that Black Monday occurred on October 19th, 1987. Fan Marino swears it happens every January after Week 17. You get the point.
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