Athleticwear and sports retailers report poor Q4, annual earnings

Many retailers are reporting their shopping season and/or annual earnings, and for the most part, things aren’t looking so great for the major athletic-apparel retailers.

Nike, which reports its earnings Tuesday afternoon, is the subject of much debate among analysts, who often look to the retailer when assessing the health of companies in the athleticwear and footwear space. Although the company’s shares have risen 16% over the past six months, Nike might not be meeting expectations when it comes to its DTC business, which many do expect to grow stronger in the long term.

• Those bullish on Nike hope the company not only beats earnings expectations but is able to provide positive guidance.

For other athleticwear and sports retailers, the results are in…

Foot Locker: Speaking of Nike, Foot Locker CEO Mary Dillion reaffirmed its relationship with the brand, telling investors during a Monday call that, “The fruits of our renewed commitment to one another will begin to show up in holiday this year as we build increasing momentum to 2024 and the 50th anniversary of Foot Locker.”

• This proclamation came on the heels of posting holiday-quarter sales that came in at $2.34 billion, slightly less on a YoY basis.

Adidas: The German sportswear company has faced numerous headwinds, most notably the termination of its partnership with Ye. The company also has a new CEO after  Kasper Rorstead left and was replaced with Bjørn Gulden at the start of this year.

• Adidas’s revenue increased 6% in 2022, but net profits fell 83%. In Q4, the aftermath of the Yeezy fallout, revenue slowed dramatically to ~$519 million USD.

Gap: The company that also owns and operates Old Navy, Banana Republic, and Athleta has struggled in the past year as the retailer reported sales down 6% annually from $4.53 billion to $4.24 earlier this month.

• While Gap is still on the hunt for a permanent solution for its CEO role, Athleta CEO Mary Beth Laughton left the company earlier this month.

Dick’s Sporting Goods: Perhaps the lone bright spot in the athletic-sportswear space, Dick’s Sporting Goods posted same-store sales increases of 5.3% during Q4—doubling analysts’ expectations. CEO Lauren Hobart told analysts that their shoppers are prioritizing fitness even more than before the pandemic.

• “As planned, we continued to address targeted inventory overages, and as a result, our inventory is in great shape as we start 2023,” Hobart said in an earnings release.