Nike's "race ... to recapture its former glory" is "far
from over," according to CNBC's Jerry Cobb, who profiled the
company on last night's "Business Center." Morgan Stanley
Dean Witter analyst Josephine Esquivel said Nike "has a lot
of proving to do in terms of do they have the product
strategy right, do they have the overall company strategy
right?" In addition to a decline in demand for athletic
footwear, Nike is "also suffering from a combination of
higher interest rates, a stronger U.S. dollar and a wave of
consolidation in the domestic retail industry." Dain
Rauscher's Robert Toomey noted Just For Feet's bankruptcy
and store closings at the Venator Group: "We think that
there are some other large athletic retailers that are going
to be closing more capacity. I think the market has really
been spooked by this consolidation in capacity." Cobb said
while Nike "faces some big challenges, analysts say
investors have overreacted in pushing the stock down to a
new 52-week low" of 25 3/16 recently. Oakmark Fund's Bill
Jacobs, on Nike: "Inventories are very clean. You've got
demand in Asia Pacific coming back. You've got Nike gaining
share in literally every region they're competing in.
You've got them cutting cost, reducing overhead, buying back
stock, and yet in all that time, the stock is actually
down." Cobb: "Most observers say it's just a matter of time
before Nike's shares get back on track." Shares of Nike
were up 4 1/8 yesterday to close at 33 (CNBC, 3/15).
