Warm Winter In The United States Has Caused Clothing Retailers To Suffer From "Extreme Cold", But Nike Is An Exception.

A warm winter makes the United States

Extremely cold.

According to Bank of America data, clothing sales in October dropped by 2.5% over the same period last year.

But Nike is an exception.

In December 23rd, Nike released a beautiful quarterly report, which has achieved two digit sales growth for eighth consecutive quarters.

Nike's share price has risen 37%, so far this year.

In stark contrast, Nike's biggest rival in the North American market is Under Armour.

In the past 3 months, the stock price of the latter has fallen by more than 20%.

In order to turn the tables, Under Armour recently appointed the chief financial officer of the company.

As the most unstoppable sports brand in sporting goods market, Under Armour said the weakness in the past 3 months has something to do with the warm winter in the United States this year.

In a recent research report, Wells Fargo said: "we do not see any signs of winter at present.

From the third quarter revenue situation, warm winter is affecting.

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It is reported that in October this year, the average temperature in the United States was 14.1 degrees Celsius, the highest in 1963.

In November, the temperature in New York increased by 9 degrees Celsius last year.

Therefore, sales of winter clothing, including coats, hats, boots and so on, are at a standstill.

On November 10th, shares of four large department stores such as Messi (Macy's), Cole (Kohls), Jesse Pani (JC Penney) and Nodes Tron (Nordstrom) all fell by 2%-5%.

The impact of warm winter in the United States on clothing retailers also spread to sportswear brands. According to Bloomberg News in December 23rd, clothing sales in Under Armour slowed down in recent months, but did not reveal the extent of the impact.

Because the sports brand, which started with sports tights, has increased many footwear products this year, but more than 70% of its revenue still comes from clothing sales.

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At the same time, as the second largest brand in the US sports market, Under Armour has always been highly dependent on the US market, and the pace of overseas expansion is particularly slow.

Compared with the global layout of Nike and Adidas, Under Armour is more difficult to escape the influence of the American clothing market.

By contrast, the situation of Nike is quite different.

Chen Grazutis, an analyst at Bloomberg, said Nike 2/3's sales revenue came from footwear products, mainly basketball shoes.

In the latest earnings report released in December 23rd, Nike also said that sales of Kobe series boots, LeBron series boots and Jordan brand basketball shoes are important sources of income for the US brand.

In addition, Nike, which has global layout, has a larger overseas market share than the US market.

At the same time, the effectiveness of the US brand overseas expansion is considerable. In the most critical Chinese market, Nike continued to grow 24% in the second quarter after the first quarter sales surged by 30% in the Greater China region. The sports giant maintained a strong momentum in the Greater China region.

Thus, compared with other American brands, the US single market has little impact on Nike.

Of course, Nike is not able to escape this "warm winter".

The two quarter's earnings report showed that Nike's product inventories grew by 11% over the same period last year.

However, excluding the exchange rate effect, the order volume of Nike brand increased by 20% between December 2015 and April 2016.

This shows that Nike's inventory situation can be improved to a large extent.

Even if we escape the warm winter of the United States, Nike should not be too optimistic. After all, the weather is only a casual factor.

In addition, the Wall Street Journal said the latest report shows Nike's basketball shoes.

Sales are still growing, but sales of key products such as LeBron series boots have slowed down.

At the same time, as the NBA Jinzhou warriors and Stephen Currie continue to be hot, the market heat of Under Armour's Treasury boots is in the "burst" trend.

Nike clearly needs to remain vigilant.