Nike Attempts To Buck The Amazon Trend

Courtesy of Benzinga.

Despite beating Wall Street estimates for EPS for the 15th quarter in a row, Nike Inc (NYSE: NKE) posted its first back-to-back revenue misses in years. As a result, the stock has been punished. Most of the damage has been done since it Q1 report on March 22.

After a pre-earnings run from the $58 area to $65, the issue surrendered over $2 the day following the report ($64.90 to $62.44) and continued to move lower, briefly touching $52.92 before rebounding to $54 area.

So what’s Nike is doing to shore up its flagging revenue? Believe or not, there are continuing to open new stores, and doing so in the Amazon.com, Inc. (NASDAQ: AMZN) era, where brick-and-mortar stores are falling by the wayside and closing down shops.

What makes the move even more interesting is where they are opening new stores.

Related Link: Nike Is Losing U.S. Market Share, And Future Orders May Be Peaking: Bank Of America Downgrades Stock

Open Up

Over the past year, Nike has opened nine new stores across the United States. The placement of these store locations are possibly indicative of Nike’s strategy to stretch across larger boundaries.

On April 9, 2015, Nike opened its first Community Store in the nation’s capitol in Washington D.C., which also happens to be the first store opened on the East Coast. Nike’s new stomping grounds opened outside Ivy City’s historic Hecht Co. warehouse location located at 1401 New York Ave. The Nike Community Store model focuses on evoking positive change in local communities to create opportunities for employment and open a door for stronger community engagement.

Going Downtown

Over a year later, Nike has taken initiative to open a new store in the heart of a city that has been on the rise for almost a decade: Detroit. On May 26, 2016, the new, two-story 22,000-square-foot Nike Community Store made its debut at 1261 Woodward Ave. in Downtown Detroit.

It seems Detroit is trying to draw in a young and fresh faces. An important part of opening this store is that the store aims to hire at least 80 percent of its employees within a five-mile radius of the location.

Nike Store employee and Detroit resident Antonio Hill is excited about working at the new Nike Community Store and is passionate about what it can do for the city.

“I feel like the Nike store in Detroit is symbolic of Detroit’s come up as a whole. A lot of major cities have a Nike store. This is a staple that is going to take us over the top,” Hill remarked about the opening of the Nike Store in Detroit.

Nike is building a bridge of opportunity in growing cities that need a stepping stone.

Perhaps the double downgraded by Bank Of America and Morgan Stanley has contrarians bottom fishing in the issue. After a lower open, it briefly touched $52.92 and has rebounded into the mid $54 handle.

Image credit: Emily Elconin

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