US Softlines Retail "UBS Evidence Lab inside: Secondary Sneaker Market: ..."

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US Softlines Retail "UBS Evidence Lab inside: Secondary Sneaker Market: ..."

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US Softlines Retail Equities

AmericasUBS Evidence Lab inside: Secondary Sneaker

Market: June Data a Modest Negative for Nike Retailers, Specialty

Jay Sole

Analyst

jay.sole@ubs.com

Secondary market prices weakened y/y for Nike, while Jordan improved: +1-212-713 3559

New UBS Evidence Lab data shows Nike brand footwear prices in the secondary sneaker Zuzanna Pusz, CFA

market decreased 1.7% in June. Growth remained negative for the second consecutive Analyst

month (Fig. 1, > Access Dataset). The June growth rate was a ~190 bps improvement zuzanna.pusz@ubs.com

from a 3.6% decrease in May. At the same time, Jordan brand prices increased 2.0% y/y +39 027 2100 226

in June, and this was a 610 bps improvement m/m (Fig. 11). Overall, we view these data Robert Krankowski

points as a modest negative for NKE. We believe Nike still has much work to do in order Analyst

to return to sustainable sales growth with meaningful margin expansion (link). We robert.krankowski@ubs.com

believe the market is still pricing in a solid turnaround. Thus, our rating is Neutral. +44-20-7568 1152

Mauricio Serna, CFA

Secondary market data is a reasonably good proxy for Nike brand momentum: Analyst

The pivotal question around Nike is when will brand momentum rebound? We believe mauricio.serna@ubs.com

the stock price will improve once investors gain confidence Nike's growth rate has +1-212-713 9028

bottomed and will turn “less bad,” with visibility into a return to sustainably positive Natalie Koltermann

growth at some point. Secondary market data suggests that inflection is not here yet. Associate Analyst

natalie.koltermann@ubs.com