After Urban Outfitters, Inc.
The latest proprietary survey indicates that U.S. consumers could curtail spending ahead, "with apparel & footwear being the most likely areas of pullback," according to Jefferies.
The Apparel & Footwear Analyst: Corey Tarlowe downgraded the ratings for Urban Outfitters, Foot Locker and Nike to a Hold.
The Apparel & Footwear Thesis: The resumption of student loan repayments could "weigh further on already soft sales," Tarlowe said in one of the downgrade notes.
Urban Outfitters
The analyst reduced the price target from $42 to $31. He said that the company's top-line headwinds "could persist through F'25."
Foot Locker
The price target was slashed from $28 to $18. "Coming into this year, we believed FL's new mgmt would help to reaccelerate the business, but the turnaround has been slower than we anticipated," the analyst wrote.
"With the company's recent movements in guidance and non-Nike sales projections, we move to the sidelines," he added.
Nike
The price target was lowered from $140 to $100. "We see incremental risk ahead for NKE as the wholesale channel is likely to remain pressured and growth in China faces macro headwinds," Tarlowe said.
Tight inventory management through at least yearend could reduce replenishment orders and exert pressure on Nike's wholesale channel, the analyst stated. "Meanwhile, NKE's ongoing focus on increasing DTC sales penetration is likely to expand margins over time, but we think the current consumer environment could push out the timing of this expansion," he added.
URBN, FL, NKE Price Action: Urban Outfitters had declined by 0.3% to $31.81, Footlocker was down 2.56% to $17.30 and Nike fell by 0.13% to $90.73 at the time of publication Monday.
