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Sports Retail Shaken Up Amid Word Nike Could Sell Direct On Amazon

Courtesy of Benzinga.

Sports Retail Shaken Up Amid Word Nike Could Sell Direct On Amazon

Sports retailers were moving Wednesday morning following channel checks from Goldman Sachs analyst Lindsay Drucker Mann that suggest Nike Inc (NYSE: NKE) could begin selling directly through Amazon.com, Inc. (NASDAQ: AMZN).

NPD Group analyst Matt Powell also tweeted about the potential move.

What Nike Could Win

The athletic apparel giant already has a presence on Amazon-subsidiary Zappos, but sells only through unlicensed, third-party resellers on Amazon itself.

Nike could see a 100 basis points rise in global sales by selling direct on Amazon, according to Mann, amounting to $0.6-1 billion in retail sales.

This growth would be driven by increased control over how it appears on the site, citing Under Armour Inc (NYSE: UAA)’s business on Amazon as a baseline.

Under Armour already sells directly under it’s own, customized page on Amazon. It also has licensed third-party sellers on Amazon Marketplace. This setup allows Under Armour’s newest styles to appear sooner than Nike’s and encourages more customer reviews.

A cleaner, less fragmented landing page for consumers on Amazon would also appeal to millennials who prefer shopping online.

The Movers

The following retailers were moving in Wednesday’s pre-market session on the speculation:

  • Foot Locker, Inc. (NYSE: FL) down 6 percent.
  • Dicks Sporting Goods Inc (NYSE: DKS) down 5.9 percent.
  • Finish Line Inc (NASDAQ: FINL) down 4.8 percent.

Nike shares also rose as much as 1.9 percent on the report.

Related Links:

Previewing Nike’s Q4 Earnings: 3 Recent Developments Increase Concern

Nike Says Futures Orders Don’t Matter; Some Analysts Agrees

Latest Ratings for NKE

Date Firm Action From To
Jun 2017 JP Morgan Downgrades Overweight Neutral
Apr 2017 Argus Downgrades Buy Hold
Jan 2017 Atlantic Equities Initiates Coverage On Overweight

View More Analyst Ratings for NKE


View the Latest Analyst Ratings

Posted-In: Goldman SachsAnalyst Color News Sports Analyst Ratings Movers Trading Ideas General Best of Benzinga


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