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Key Takeaways
- Morgan Stanley stated in a note released on Thursday that Nike is unlikely to see a turnaround before 2026.
- Analysts warned that New Balance, Asics, and Lululemon might suffer if the shoe giant and retail giant is able to pull off a comeback.
- Analysts said that Nike has lost market share in recent years.
Morgan Stanley analysts, who are looking at the possibility that Nike will return to happier times, say New Balance, Asics, and Lululemon should be on their toes.
Morgan Stanley, in a note released ahead of Nike’s scheduled earnings announcement on Thursday afternoon, said that it is unlikely that Nike (NKE), will pull off a turnaround before 2026. The results will be the second under its new CEO. Its recovery could cause problems for New Balance (NB), Asics and Lululemon(LULU) as they “enjoyed disproportionate profits from [Nike’s] Analysts said that there have been “missteps” during the past five-year period.
Analysts say that New Balance is the most vulnerable because it has gained momentum and market share in online searches as Nike has struggled over the past few years. New Balance may still not compete directly with Nike because it focuses on lifestyle footwear rather than athletic shoes.
Analysts said that Asics had seen revenue growth over the past few years and sold similar products. Asics is listed in Japan, but trades over the counter in the US. New Balance is not publicly traded.
The brand’s focus areas are similar [Nike]—with both looking to expand wholesale & specialty running category share—poses a risk, particularly if [Nike] Morgan Stanley stated that the product “has been launched successfully”.
Morgan Stanley says that Lululemon is vulnerable because of its recent gains in market share and revenue. Nike has launched an apparel line featuring reality TV star Kim Kardashian to try and attract women who would otherwise buy Lululemon.
