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Here's Why Nike (NKE) & Under Armour (UA) Stock Gained Today

Ryan McQueeney
Updated

Shares of athletic wear giant Nike NKE gained about 3.2% Friday, while competitor Under Armour UA added nearly 2.3%, after Foot Locker FL) reported an earnings and revenue beat in the most recent quarter.

Foot Locker, a major athletic shoes and apparel retailer, posted earnings of 94 cents per share, which beat the Zacks Consensus Estimate of 91 cents. Foot Locker also posted a revenue beat, with total sales coming in at $1.780 billion versus our consensus estimate of $1.764 billion.

Foot Locker also announced that comparable-store sales jumped 4.7% during the quarter, and the company opened 23 new outlets, remodeled 64 outlets, and closed 18 outlets (also read: Foot Locker Beats Q2 Earnings Estimates, Stock Gains).

Shares of FL skyrocketed after the report, and the stock is currently up about 10.6% on the day. Nike and Under Armour also benefitted from the report, as Foot Locker is a major supplier of both brands throughout the country.

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These solid results from Foot Locker imply that shoppers are out and shopping for athletic shoes. This is obviously great news for Nike, the biggest player in the sneaker world, but it’s also a good sign for Under Armour, which has ramped up its shoe business over the past few years.

On the other hand, Adidas ADDYY remains relatively flat on the day. Adidas has a stronger market share in Europe, and while Foot Locker does operate stores outside of North America, it is not the dominant shoe retailer that it is in the U.S.

Foot Locker’s strong report is also another good indication that the retail landscape has recovered after a sluggish start to the year. After Target TGT and Walmart WMT displayed mixed results in their earnings reports this week, investors were left unsure about the state of retail, but it should come as a positive indicator that smaller, more specific stores like Foot Locker are performing well.

For an in-depth analysis of the retail landscape right now, check out this week’s episode of the Zacks Friday Finish Line podcast:

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
WAL-MART STORES (WMT): Free Stock Analysis Report
 
TARGET CORP (TGT): Free Stock Analysis Report
 
NIKE INC-B (NKE): Free Stock Analysis Report
 
ADIDAS AG-ADR (ADDYY): Free Stock Analysis Report
 
UNDER ARMOUR-A (UA): Free Stock Analysis Report
 
FOOT LOCKER INC (FL): Free Stock Analysis Report
 
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