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The reigning NBA MVP gives UA a boost in its hoops war with Nike

Nike is starting to really feel the heat from rival Under Armour, a leading consumer analyst told CNBC on Wednesday, a day after the former reported better-than-expected quarterly earnings and revenue.

"Last year ... Nike's signature basketball business took a huge hit because of the onset of Steph Curry and Under Armour's basketball shoe," Canaccord Genuity's Camilo Lyon told CNBC's "Squawk Box."

Curry — the Golden State Warriors scoring machine who's having a rather quiet season by his standards — was the NBA's Most Valuable Player for the last two seasons.

After the bell on Tuesday, Nike reported an 11 percent increase in adjusted fiscal second quarter earnings of 50 cents a share on nearly $8.2 billion in revenue, which reflected a year-over-year bump of 6 percent.

On the conference call, executives tried to steer investors away from a key metric of future orders that showed just 2 percent growth on a constant currency basis, including a 4 percent contraction in North America.

Shares of Nike were sinking and then soaring in the premarket before settling in around the flat line in Wednesday morning trading at about $52 per share. The stock has dropped nearly 17 percent so far this year.

Under Armour was around $26 per share in late morning — down about 2 percent for the day and down 63 percent for the year, after taking major legs down in April and in October.

But Canaccord's Lyon believes in Under Armour. "The global growth opportunity that it has in front of it is unparalleled," he said, putting a price target of $44 per share on the stock.

Meanwhile, Senior Research Analyst at Susquehanna Sam Poser also told CNBC on Wednesday he sees Under Armour's growth potential, but stressed that Nike is not known for shying away from competition.

"I think Nike had a hiccup last year," he said. "I think that's going to work both in the near term and the long term."

"I like both these companies very much, but I really think Nike is not a complacent company, nor is Under Armour, and I think that's really what's made Nike the winner it is and will make it what it will be," Poser argued.

The next leg of the competition will come from Under Armour going after Nike's "cool factor," he said.

"The kid who is wearing Under Armour at a Little League game, and you see the kids are head to toe [in] Under Armour, when that kid goes into the locker room and changes, he's putting on his Jordans," Poser said, referring to Nike's iconic Air Jordan basketball sneaker.

"Under Armour has the opportunity to get to that sort of 'cool factor' of wearing it off-field, and it hasn't gotten there yet. And for me, that's the longer term opportunity," he added.

Some analysts, like Matthew McClintock at Barclays, see a more hopeful picture in Nike's earnings report, especially in the shoe space that has been challenged by Under Armour.

"At the end of the day, we saw ... stabilization in the numbers. The company beat on the bottom line, the company beat on the top line and then the company reaffirmed a very strong and stable innovation pipeline," he said — touting the Nike HyperAdapt 1.0, the self-lacing shoe like the one in the "Back to the Future" movie.

McClintock cited same-store sales as an especially promising indicator of Nike's upward trajectory. For its retail business, North American same-store sales were up 10 percent during the quarter. "That is one of the best results across the entire retail landscape," he argued.

Nike's management welcomes healthy competition, and it's beginning to refurbish its signature shoe business in response to challenges from Under Armour and German sportswear giant Adidas, McClintock said.

"'Basketball is back' is the phrase that Nike used, and I believe it," he said. "Apparel is a piece of the business and they talk about it, but at the end of the day shoes are the bigger market and that market continues to grow and Nike has a huge competitive advantage."

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