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September 26, analysts and investors concerned about the first quarter report released this week, Nike, along with China's economic slowdown led to decline in consumer demand, the Chinese market is led to serious concern. The Lyon ( isabel marant boots ), an analyst at investment bank CanaccordGenuity widespread product inventory backlog and excessive discounts view of the entire market, Nike's business in China, more and more cautious. Lyon has just concluded a week-long trip in China. He said, no doubt, Nike is in a strong leading position in China, however, this advantage has also been the impact of macro stress and the competitive promotional environment. Nike previous fiscal year's sales in China totaled $ 2.5 billion, accounting for more than 10% of its total sales of $ 24.1 billion.

Lyon estimates that China contributed 30% of operating profit for the sports equipment giant. In June of this year, the share price of Nike, the largest decline since December 2008, Previously, Nike's fourth-quarter profit unexpectedly fell, the slowdown in Chinese demand. Chinese orders in the fourth quarter, an increase of 2%, compared with an increase of 20% in the third quarter. Lyon said, the problem is that the deterioration of domestic brands and the Nike international brands such as China's demand is to resort to discount promotions to get rid of a lot of inventory.

The analysts found through sampling store in Shanghai , after Nike and Adidas, China's third-largest sports brand Li Ning store all the goods are sold to play Qizhe he said, China's lower prices ANTA brand shoes tickets sell commodities, the clothing by Sizhe sale. Lyon Nike sportswear in China are being sold to Qizhe to Seven, half of the amount of the price, Nike is still trying to change the type of clothing, from casual sports style transformation of the functional route. Lyon commented that no brand is immune to the impact of this level of discount promotions, even Nike; practical point of view, we think Nike also need to make three to four quarterly inventory under control.

Lyon, Li Ning will close 3,000 of the 8,000 points of sale, which also cast a shadow over the market total inventory position. These brands get together with sales is not a good thing: He said, for example, five of the Li Ning store next to a Nike owned stores and a four Nike distributor outlets. He said that, despite Nike enjoys the advantages of high-end brand position, but promotional activities get together will certainly impact the purchase decisions of consumers. Lyon added Nike in the United States by the factory direct sales stores to solve the problem of excess inventory, but Nike in China has yet to establish a similar network. Nevertheless, he pointed out that the outlet store Nike being established brand guerrilla store, or temporarily set up to help clean up the excess inventory. Than Nettie (Mike Binetti), UBS ( isabel marant shoes ) analyst said, Nike is likely being the expense of profit margins for the increase discounts to local retailers to increase orders in China. He said, we believe that Nike is striving to create a positive future. Nettie also just came back from China.

He said, Nike is now careful to take action. Nevertheless, than Nettie said, growth in demand in the United States continue to accelerate enough to offset the adverse impact of China, but also the surplus. Accept FactSet survey of analysts expected earnings report released Thursday, Nike's profits from the decline in earnings per share of $ 1.36 to $ 1.12 per share. Analysts expected, due to the needs of drivers in the United States, sales rose to $ 6.43 billion from $ 6.08 billion. The exception of China, the Wall Street still concerned about demand in Europe, a major overseas markets in Europe is also Nike. Said an analyst at Credit Suisse (CreditSuisse) Bath (isabel marant boots navy), the strong performance of the North American market may be the European market remains in the doldrums, and offset the challenges of the Chinese market, these two factors are limiting the upside potential of Nike.