Nike’s Losing Streak Exacerbated by Poor Q2 FY23 Results from Major Sports Retailers

Bad Week for Sports Retailers

Two of the biggest sports retailers in the US, Dick's Sporting Goods ( and Foot Locker (, released weak results for the three months ended July 29 (Q2 FY2023) and downgraded their guidance this week. Their quarterly reports underscore the challenging environment the market faces, amidst still elevated inflation and high interest rates, which have a negative impact on demand of discretionary goods. These firms are wholesale partners of sportswear giant Nike and their discouraging results exacerbate the historic losing streak of its stock (

Dick's Sporting Goods

The retailer reported on Tuesday a Revenue increase of 3.6% y/y to $3.224 billion in Q2 FY2023, driven by "robust transaction growth and continued market share gains", with same-store sales increasing by 1.8%. [1]

The bottom line performance however, was disappointing, largely due to "elevated inventory shrink", which typically refers to loss of inventory from theft and other non-sales reasons. Net Income slumped 23% to $244 million and $2.82/share, while Gross Margins narrowed to 34.42% (from 36% a year ago).

These poor figures, led the company to slash its full FY2023 outlook, now expecting Earnings/share of $11.33 to $12.13, a downgrade of around 12%. Executives reaffirmed the underwhelming guidance for comparable store sales growth of "flat to positive 2.0%".

Markets reacted negatively to the results, as erased around 24% of its value on Tuesday after the release, posting its worst day on record that pushed it to negative territory for the year.

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Foot Locker

Foot Locker followed on Wednesday with abysmal top and bottom line results for Q2 FY2023. Total Revenues declined around 10% y/y to $1.864 billion and same-store sales dropped 9.4%, driven partly by "ongoing consumer softness". [2]

It also registered its first Net Loss in more than three years, to the tune of $5 million or $0.5/share. Excluding one-time items, it posted Earnings of 0.4/share. Gross Margins contracted 4.6% from a year ago, due to promotional offers and shrink, a problem that affected Dick's Sporting Goods as well.

The company downgraded its projections for the full fiscal 2023, now expecting a bigger Revenue decline of 8%-9%, narrower Gross Margins of 27.8%-28% and Earnings/share for $1.3-$1.5.

After the dismal report, plunged nearly 20% on Wednesday, to the lowest level in nearly thirteen years. had made a strong start to the year, but this quickly changed and had collapsed again after the previous quarterly report in May.


Dick's Sporting Goods and Foot Locker are amongst the biggest US sports apparel chains, but Nike dwarfs them, since its direct-to-consumer (DTC) sales (online & brick-and-mortar) exceeded $21 billion in Fiscal 2023 (year ended May 31). [3]

Nike has complex relations with third-party vendors, as it has been focusing on its DTC channels, but the above retailers are still amongst its main partners and Sales to Wholesale Customers amounted to nearly $27.5 billion, capturing the lion's share of its revenues.

The weak quarterly reports from DKS and FL highlight the headwinds faced by the sportswear market and exacerbated the decline of Nike's stock this week. is having a historic losing streak, as it has not posted a profitable day in over two weeks, also weighed by China's faltering recovery.

In late-June, the sneaker giant had reported mixed results for the quarter ended May 31 (Q4 FY2023), but one of the high points was the 25% sales growth in Greater China, which outpaced all other regions. Since then however, the situation in China has deteriorated with more disappointing economic data and although authorities are trying to support the recovery, they seem reluctant to implement bolder stimulus for now.

Nikos Tzabouras

Senior Financial Editorial Writer

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.



Retrieved 25 Aug 2023


Retrieved 25 Aug 2023


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