Which Shoe Retailers Mirror Nike's Performance?

Nike Inc NKE is pressured by competition, with adidas AG (ADR) ADDYY and Under Armour Inc UA UAA breathing down its neck.

Even as Nike fights its own frailties, Benzinga looked at the prospects of the company's performance as having a bearing on footwear retailers such as Foot Locker, Inc. FL and Finish Line Inc FINL.

Nike's fiscal first-quarter results released in late September were lukewarm, with some metrics such as futures orders, gross margin and EBIT raising red flags. However, the bottom line did beat on a tax benefit.

Past Prints, Performances In Review

The company is set to release its second-quarter results Tuesday after the market closes, with the consensus call at $0.43 per share in earnings per share on revenues of $8.09 billion. In the same period last year, the company earned $0.45 per share on revenues of $7.69 billion. Once again, all the metrics that matter will be on the radar.

Following the release of its fiscal first-quarter results after the market close on September 27, the company's shares fell about 6 percent in the five sessions that followed the release. As mentioned earlier, the futures orders metric was the culprit that stifled the stock.

Finish Line, meanwhile, rose over 2 percent on the first session but pulled back gradually before ending 2.6 percent lower following the five-session timeframe. Foot Locker fell 0.34 percent in the first session and 1.6 percent over five days.

The fiscal fourth-quarter results of 2015 released after the market close on June 28 saw Nike's share rise 3.8 percent in the next session and a 5.1 percent over five sessions following the results. In comparison, Finish Line added 2.1 percent the next day and 4.1 percent over five sessions and Foot Locker surged up 5.6 percent in a session and 7 percent over five sessions following Nike's results.

Stock performances following the release of Nike's fiscal third-quarter results on March 22 after the market close revealed a 3.8 percent drop in the shares of Nike in the first session. This drop steepened to 4.4 percent over the five sessions.

In comparison, Finish Line fell 8.3 percent in the next session but recovered and added 8.3 percent over five sessions. Foot Locker fell 3.6 percent the next session, although it trimmed its losses to 0.7 percent over five sessions.

Nike Results Pressure The Sector

Price action shows Nike's results do produce a knee-jerk reaction among the footwear retailers, although Foot Locker seems to have a greater correlation to Nike than Finish Line. Given that merely stock prices were taken as a proxy for performance and other factors that would have likely impacted individual stocks were not considered, the deduction may not prove that accurate. All the same, it does give a rough indication of the relationship.

Finish Line To Report This Week

Finish Line is due to report its fourth-quarter results before the market opens on Wednesday. The company is expected to report a narrower loss of $0.18 per share on revenues of $412.18 million, up an estimated 7.90 percent.

At Time Of Writing

• Nike was down 0.28 percent to $50.78.
• Foot Locker was gaining 0.36 percent to $75.71.
• Finish Line was adding 1.83 percent to $22.84.