Why Nike Stock Lost 11% in October

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What happened

Giant of sports shoes and clothing Nike (NYSE:NKE) trailed the market last month losing 11% from a 7% drop in the S&P500 according to data provided by S&P Global Market Intelligence .

^SPX given by Y charts.

However, the drop did little to detract from long-term shareholder returns, as Nike’s 20% gain so far this year far outpaces the market’s 3% rise.

So what

With no major news from the company last month, the stock price tumble was not a reaction to specific Nike trends. Instead, the actions were apparently taken in a broader market decline it was particularly difficult for stocks like Nike, which had posted impressive gains in the market earlier in the year.

A jogger laces his shoes.

Image source: Getty Images.


Now what

Nike is entering a holiday period that is critical to management’s broader growth goals. If all goes as planned, the retailer should announce faster growth in fiscal year 2019 , as well as its first gross profit margin increase in three years. Successes here enable the retailer to accelerate investment in its attractive direct-to-consumer business, which, in turn, should pave the way for increased sales in the future. Investors are better off focusing on these operational trends and doing their best to ignore short-term price swings like these.

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Demitrios Kalogeropoulos owns shares of Nike. The Motley Fool recommends Nike. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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