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The sportswear giantannounced earnings on March 21. The company's sales and profits were hit by a slowdown in the retail industry. Sales growth for next quarter is looking bad, too. This has analysts seeing nextfiscal year as a "rebase year." The company is now focusing on shifting away from wholesale, and to building its direct-to-consumer infrastructure. As Nike shifts to focus on both direct to consumer and online, there is some expectation that it will be a rough time. As Nike shifts to focus on both direct to consumer and online, there is some expectation that it will be a rough time. "Its going to get darker before the dawn" analysts atUBS wrote in the company's latest research note to clients. Much of the concern comes from the poor futures reported at negative 4%. This metric, which is mostly a measure of orders Nikehad from retailers that it expected to fillin the nextsix months, wereonce a key metric ofdemand for Nike's products when it was largely a wholesaler. That's the first time this metric has been negative in seven years, as the Wall Street Journal reported, citing Citi Research. Analysts chalk this up to the switch to direct to consumer, and the speed of its new supply line that can drop products to retailersmuch faster. "We think theres truth to comments that futures and revenues will remain less correlated as [Nike]rolls out product with lead-time of less than 3 months," UBS said. Wikimedia Commons The broader retailclimate will also act as a headwind as Nike tries to make its shift. Athletic footwear sales declined 14% in February comparing year over year, according to industry analysts the NPD Group. The classics category also showed a decline, which have been relative strong points in relative quarters, as well as the running category.
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