Nike burns $20b in value as stealing adds to woes

afr.com:

New York | Nike posted a record streak of losses as concern over China’s sluggish consumer economy builds and elevated merchandise stockpiles continue to weigh on profitability across the activewear industry.

The stock slid 1.4 per cent to $US101.46 on Tuesday, falling for a ninth straight session in its longest losing streak since the company’s initial public offering in December 1980. The latest drop came after retailer and Nike customer Dick’s Sporting Goods reported disappointing fiscal second-quarter results and cut its profit outlook for the year, due in part to more theft at its stores.

Nike’s value is going up in flames amid concerns over overstocking, a slowing China and now theft. John Woudstra

The rout has wiped out nearly $US13 billion ($20 billion) of Nike’s market value, which currently stands at $US155 billion. Even before the recent slump, Nike had failed to keep pace with the advance in the broader market. It is now down 13 per cent this year, while the S&P 500 Consumer Discretionary Index has surged 29 per cent.

Nike’s weakness coincides with increasing signs of a soft consumer rebound in China, which is a key growth market for the sports gear giant. China’s retail sales growth decelerated to 2.5 per cent in July, worse than the median forecast of 4 per cent.

“Investors are waking up to the fact that China’s growth is going to be slower,” said Matt Maley, chief market strategist at Miller Tabak + Co. They’re also realising that China is not going to do as much as it has in the past to boost growth, he said.

In its most recent quarterly results in late June, Nike reported earnings per share that fell just short of analysts’ expectations, signalling that the company is still working to sell off excess