Nike's 'unprecedented' 40% off sale reveals how big the brand's problems are (NKE)

pulse

October 12, 2017 5:52 PM

Nike's 48-hour flash sale is great for consumers, but not great for Nike, which is trying to sell more product full-price.

Nike is holding a big sale.

The largest sports brand in the world is having a 40% off sale on its website, Nike.com. A smattering of product is included in the 48-hour sale, including running shoes, sportswear, and specialty gear.

It's a big change for the brand, which in the past has rarely held sales. Nike has been more promotional lately, in light of increased competition and potentially shrinking consumer demand for sporty clothing and sneakers.

Matt Powell, an analyst for NPD Group, called Nike's sale "unprecedented" in a tweet, calling it a sign that the "industry is going the way of the rest of teen retail."

A survey of teenage consumers released on Wednesday by Piper Jaffray also showed that Nike's dominance as a favorite of teens was slipping in favor of brands like Adidas and Vans. It's still the favorite of upper-income teens, with 46% saying they preferred the brand over others — but that number is down from 51% a year ago.

Nike's sales were down 3% in the latest quarter, with CEO Mark Parker stating in an earnings call that a promotional market would continue to cause headwinds for the company. Another sales decrease is predicted for the next quarter before the trend reverses.

"We still see a dynamic and promotional landscape, one that is having a pronounced impact on physical retail," Parker told investors.

Nike's CFO, Andrew Campion, told investors on the call that discounts are a temporary problem.

"That promotional marketplace will put some pressure on pricing and off-price in the short term," Campion said. "But we definitely believe that that is a short-term impact."

Bottom line: if you want to get your Nikes on sale, now is the time.

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