Dick's Sporting Goods' Warning Bodes Poorly for Nike and Lululemon Stocks

Dick's Sporting Goods (NYSE: DKS) shares collapsed following the company's fiscal second-quarter earnings report, as it warned that the athletic footwear and apparel space has become more promotional. In addition, it said there were fewer new footwear launches in Q2, and that those launches underperformed its own and industry expectations. The commentary was similar to that of JD Sports Fashion, which operates stores under the Finish Line, Hibbett, and other banners. JD Sports also said it was facing a highly promotional environment and experiencing economic and footwear-product-cycle headwinds. Both Dick's and JD Sports are major Nike (NYSE: NKE) retailers, but industry headwinds could extend beyond Nike and affect other brands, including Lululemon Athletica (NASDAQ: LULU). Let's look at why I'd be reluctant to buy these two apparel stocks even while they are down.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool