Research: How Retailers Respond When Brands Start Selling Direct
In one of Nike's first earnings calls under its new leadership in 2024, CFO Matt Friend announced that the company would be re-engaging with retail partners to right some of their 'missteps related to over-centering on direct.' In 2017, Nike had drastically ramped up their investments in their own channels, including launching several web shops (such as Nike.com), mobile apps (like Nike SNKRS), and numerous physical stores. In response, many retailers pulled back from Nike and increasingly relied on other brands to stock their inventories and shelves. The Financial Times reported that the proportion of Foot Locker's inventory from Nike fell from 75% to 65% in the last three years. Nike realized their investment in direct channels was hurting their business, and they are trying to reverse course. But could all of this have been avoided?
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
an hour ago
- Yahoo
2 Dividend Stocks to Hold for the Next 2 Years
Dividend stocks can generate reliable passive income. The key is to find companies that have a strong track record of paying and increasing their dividends. Investors also want to be sure that they are picking companies that can generate enough earnings and free cash flow to cover and raise their dividends in the future. These 10 stocks could mint the next wave of millionaires › Since the pandemic began, the stock market has proven to be erratic, plunging at times only to quickly recover and launch into fresh bull markets. Today, with plenty of new uncertainty due to issues including President Donald Trump's trade wars, U.S. fiscal concerns, and the concerning trajectory of the U.S. economy, more volatility is certainly on the docket. That's why investors may want to check out some dividend stocks, which can provide reliable passive income. The returns of dividend stocks can be much more dependable than those of non-payers, especially if you choose ones with good track records and the ability to grow their earnings and free cash flows so they can keep regularly increasing their payouts. Here are two dividend stocks that meet those criteria that investors can feel comfortable buying and holding for the next two years. The iconic footwear and apparel company Nike (NYSE: NKE) has been less than iconic as a stock lately. It's now down by about 39% over the last five years (as of June 4). Intensifying competition in the footwear and apparel space, struggles with the brand, and an excessive focus on digital promotions and sales have resulted in the company underperforming in recent years. To change its trajectory, the board hired longtime Nike veteran Elliot Hill out of retirement to take the helm, and Nike is now deeply entrenched in his turnaround plan. Hill is focused on getting the company back to what it does best -- renewing its intense focus on the brand, leading the way on product innovation, and reactivating and improving its sales relationships with wholesalers. Hill also said earlier this year that Nike will be focused on five product areas -- running, basketball, football, training, and sportswear -- and three markets: the U.S., the United Kingdom, and China. But as some analysts have pointed out, Nike's turnaround could take longer than expected, especially if the global trade war continues or if the U.S. economy tips into a recession. A longer turnaround could make it difficult to entice investors to buy and hold the stock, which is why Nike is likely to make paying and raising its dividend a priority. Its yield of about 2.6% at the current share price isn't bad, but it trails most Treasury yields right now and over the past few years. In November, Nike increased its quarterly dividend by 8%, marking the 23rd consecutive year the company has hiked the payout. In a couple more years, Nike is likely to join an exclusive club -- the Dividend Aristocrats®, which are S&P 500 companies that have increased their payouts for a minimum of 25 straight years. (The term Dividend Aristocrats® is a registered trademark of Standard & Poor's Financial Services LLC.) Its ascension into that group will give Nike added some credibility among dividend investors. Nike also has a trailing 12-month free cash flow yield of 5.66%, more than double its current dividend yield. Nike has a good dividend track record and clear incentives to keep raising its payouts to reward shareholders for their patience. If its turnaround is successful, that should also enable the company to grow earnings and free cash flow, which will also bolster its capacity to pay higher dividends. If you've followed Wells Fargo (NYSE: WFC), then you know that the bank has been on a bumpy ride over the last decade. In 2016, it came to light that large numbers of employees at the bank had been opening banking and credit card accounts in customers' names without those customers' authorization. The scandal evolved into a reputational nightmare for Wells Fargo and cost it billions of dollars in fines and lost profits. Regulators put various restrictions and consent orders on the bank to monitor its actions. In addition, the Federal Reserve in 2018 put an asset cap on it, preventing it from growing its balance sheet above $1.95 trillion -- limiting its ability to expand, pursue acquisitions, and make more money. In 2019, the bank brought on Charlie Scharf to take over as CEO, and he did a tremendous amount of work to overhaul the bank's regulatory infrastructure and leadership team. Scharf also significantly cut expenses, sold off non-core assets, and ramped up higher-returning businesses like investment banking and credit card lending. This year, after Trump returned to the White House, banking regulators under his administration quickly terminated the consent orders that were put in place to monitor its behavior in the wake of the scandal, and just recently lifted the asset cap. That's a massive deal for the bank, which can now begin to grow its balance sheet again and go on the offensive in the financial services market. During the pandemic, Wells Fargo was one of the few banks forced to cut its dividend due to regulations put into place by the Federal Reserve. While the bank has been able to regrow its payout, its yield still sits in the bottom half of its peer group. Furthermore, broader deregulation of the banking sector from Trump and his administrators is likely on the way. I suspect the largest banks will eventually have much lower regulatory capital requirements than they have now, which will allow them to return more capital to shareholders. Furthermore, Wall Street analysts on average currently expect Wells Fargo to grow its diluted earnings per share by about 8% this year and by close to 14% next year, according to data provided by Visible Alpha. Over the last 12 months, Wells Fargo's dividends only consumed about 31% of earnings, so it should have plenty of opportunities to keep growing its payouts in the coming years. Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $363,030!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $38,088!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $674,395!* Right now, we're issuing 'Double Down' alerts for three incredible companies, available when you join , and there may not be another chance like this anytime soon.*Stock Advisor returns as of June 2, 2025 Wells Fargo is an advertising partner of Motley Fool Money. Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nike. The Motley Fool has a disclosure policy. 2 Dividend Stocks to Hold for the Next 2 Years was originally published by The Motley Fool
Forbes
an hour ago
- Forbes
Target Moves Pride Merchandise Aside To Spotlight Father's Day And July 4th Holidays
Target shifted a smaller, less flamboyant collection of Pride Month merchandise back to make room for patriotic, Independence Day displays in-store and Father's Day online as other major retailers are likewise reducing emphasis on Pride displays and focusing more on other summer shopping holidays, according to CNN. Target's Pride 2025 collection is streamlined to just over 100 clothing, home, food and beverage and stationery items, all exclusively for adults, with the full collection only available online and featuring less prominent displays in some of its stores – last year only about half of Target stores had Pride displays. Target Pride merchandise is facing criticism – calls it 'pathetic' and 'confusing' – with fewer prominent rainbows on display, such as beige sandals with inconspicuous rainbow-stitching detail. Other retailers making short shrift of Pride merchandise include Macy's with an easily overlooked Pride banner way down on its home page, Walmart's home page makes no mention and Gap offers nothing overtly Pride-related online. However, Nordstrom, Abercrombie & Fitch, Hollister and Kohl's highlight Pride collections on their homepages and brands, including Levi's, Converse, Nike, Puma, Apple, Bombas, Skullcandy, Diesel, MAC cosmetics, Brooklinen, Chubbies, and Jansports, offer significant Pride Month 2025 collections. The National Retail Federation predicts Americans will spend a record $24 billion on Father's Day this year, up 7% from last year, and that nearly 90% participate in July 4th celebrations, which falls on a Friday and is likely to result in a spending boost as well. After Father's Day on June 15 has passed, will retailers lean into Pride Month promotions? Target seems to be in retreat where the LGBTQ community is concerned following Target's 2023 Pride Month displays sparked consumer backlash, calls for boycotts and in-store employee harassment, leading the company to pull Pride displays from some stores that year. As a result, Pride Month merchandise selections were scaled back in 2024 and in-store displays limited to about half of its 2,000 stores. This year, its Pride merchandise appears to be downsized even more and a similar short list of stores will feature displays. In addition, after Target ended its diversity, equity and inclusion program and stopped sharing data with the HRC Corporate Equality Index earlier this year, many diverse communities – including LGBTQ individuals – have felt abandoned by a company that was once seen a champion of minority groups. After ending 2023 down 2%, with a notable 4% comparable sales decline, and revenues basically flat in 2024, Target started 2025 with revenues off 3% and comparable sales down 4% in the first quarter. Its stock price has dropped nearly 30% this year. Numerous reasons have been given for Target's continued underperformance, but its troubles started in 2Q2023 after the Pride Month controversy when comparable sales dropped just over 5%. Before that hit, revenues rose 3% in fiscal 2022. The election of Donald Trump and his administration's strong stance against DEI programs have caused numerous corporations, like Target, to reexamine internal policies that might bring down the government's wrath. With Target facing financial pressures after having alienated more conservative customers in Pride Month 2023 and most recently, those who oppose Target's DEI reversal, it appears that Target is trying to establish itself as a 'big tent' retailer, welcoming a broad range of customers without taking ideological stances that could disenfranchise one group or another. Regrettably, it doesn't seem to be working as financial results flag and calls for boycotts continue. A new survey from the Kearney Consumer Institute, entitled 'Weighting Value with Values,' found more consumers are prioritizing the price/value equation over values-based purchasing decisions. Only about 20% of U.S. consumers believe it more important for brands to voice their values, while 80% prioritize delivering on their quality expectations. Given this 80/20 spilt, there are pitfalls for brands that get out over their skis where controversial issues are concerned, such as boycotts. Notably, a surprisingly high 39% of consumers said they have participated in a brand boycott over the past 12 months. 'You're damned if you do, damned if you don't because while many people say brands should voice their values, but then they can use that against you,' shared Katie Thomas who leads the KCI internal think tank. Right-leaning Turning Point USA contributor Morgonn McMichael praised Target in an Instagram post for showing 'more American pride' this year with its family-oriented, patriotic displays front and center in her local Target store. 'If there is anything indicating a cultural shift in our country, it's the fact that Target's Pride Collection is now this small, while Fourth of July, Independence Day is celebrated galore,' she said. Big Brands Are Pulling Back On Pride Merchandise And Events This Year (CNN, 6/5/2025) Target Swaps Out Rainbow Flags For Stars And Stripes As Shoppers Notice Shift During Pride Month (Fox Business, 6/5/2025) Target, Macy's, and Walmart Among Retailers Promoting Father's Day Over Pride Month (Washington Examiner, 6/5/2025) 12 Pride Month 2025 Collections from Brands We Can Actually Get Behind (Rollingstone, 6/4/2025)
Yahoo
3 hours ago
- Yahoo
3 Magnificent Stocks to Buy in June
Shopify is benefiting from organic growth in e-commerce, and it's aiding that by expanding its addressable market in multiple ways. Cava stock's recent dip offers a great opportunity to invest in this fast-growing restaurant business. After years of setbacks, the pieces are in place for a recovery at Nike. 10 stocks we like better than Shopify › Investors can set themselves up for life with a portfolio of well-chosen growth stocks. Investing in companies that are likely to be earning substantially higher revenue and profits in 10 years than they are today will help you multiply your savings. To give you some ideas, three contributors recently selected three stocks that they believe are positioned to deliver excellent returns in the coming years. Here's why they like Shopify (NASDAQ: SHOP), Cava Group (NYSE: CAVA), and Nike (NYSE: NKE). (Shopify): Shopify is the largest e-commerce services provider in the U.S., with about 30% of the market, according to Statista. That gives it a strong moat against the competition, and it's constantly releasing new features and tools to satisfy demand and keep its top position. The company has developed a complete ecosystem offering everything an omnichannel retailer needs to operate. It has moved way past its origins as an e-commerce website developer to offer full commerce services, from back-end management systems to point-of-sale devices for physical retailers. Merchant clients can sign up for whole packages or individual components. That gives it access to large leading companies that might need specific services, and it counts businesses like Kraft Heinz and Mattel as clients. It also has partnerships with major tech players like Amazon and Meta Platforms. Not only has business been good, but revenue also grew in the 2025 first quarter by 27% year over year. It's now been eight quarters of revenue growth above 25%, and profits are also on the rise. Operating income nearly doubled in the first quarter, and free-cash-flow margin expanded from 12% to 15%. Management sees a long runway. E-commerce is still increasing as a percentage of retail sales, providing organic growth opportunities for years. According to eMarketer, e-commerce made up 20.3% of sales last year, and it's expected to increase to 23% by 2027. That represents trillions of dollars, and a large chunk of that will end up in Shopify's system as its millions of merchants benefit. It has many other growth drivers. Its merchants get stronger with time, and that's true across different time periods. Barriers to entry for entrepreneurs continue to come down, and more small businesses create new opportunities for Shopify as the leader in e-commerce. It's expanding its addressable market through increasing its product line, its geographies, and the size of its clients. And its market opportunity increased from $46 billion when it started in 2015 to almost $900 billion by 2023. Shopify stock is down this year as the market has concerns about tariffs, and now is a great time to pick up shares. John Ballard (Cava Group): If there's a restaurant stock that has the makings of the next Chipotle, it's Cava. With the stock down 28% year to date, investors have a great opportunity to start a position at a more reasonable valuation. The stock's recent dip can be attributed to its steep valuation entering the year, as Cava continues to report strong financial results. The chain is satisfying a healthy appetite for its Mediterranean-based menu. It just opened 15 net new restaurants last quarter, helping to drive revenue up 28% year over year. And it's important to point out that it is seeing strong growth at existing locations. Same-restaurant sales (comps) surged 10.8% year over year, with guest traffic up 7.5%. Cava is nowhere close to reaching its long-term goal of 1,000 restaurants by 2032. It's in only 26 states but already has a solid operating profit margin of 6.6% on a trailing-12-month basis, and that margin should continue to increase as the business scales up and leverages expenses across a larger store base. The strong growth in comps shows that Cava still has a lot of opportunity to increase sales at existing locations and expand brand awareness. The company is delivering a unique restaurant experience that is getting recognition: It was recently ranked No. 13 out of the 50 most innovative companies as chosen by the business publication Fast Company. Analysts expect earnings to grow at an annualized rate of 36%. This should be a multibagger stock as Cava expands to all 50 states. Jeremy Bowman (Nike): It's hard to call Nike stock magnificent these days. The company has gone through one of its worst periods in its history, due primarily to increasing competition and strategic errors under its former CEO. Revenue is falling by double digits and is now down 65% from its peak in 2021, steadily declining since then. However, Nike is still the largest sportswear brand in the world. It's not going to fade away into irrelevance, and the company has a number of initiatives under new CEO Elliott Hill that should help return it to growth. These include focusing more on innovation and new products, returning to more tried-and-true marketing methods, and reestablishing relationships with wholesalers after overly focusing on the direct-to-consumer channel. Nike will report fiscal fourth-quarter earnings later this month, and any good news could propel the stock higher. Though the company is facing a challenging macroeconomic climate with changing tariff rates, it appears to be regaining market share in running-shoe sales from Deckers' HOKA brand, which reported slowing growth in its recent earnings report. Nike also said in its last quarter that it had returned to growth in running footwear, driven by the Pegasus 41 and new shoes like the Pegasus Premium. Management also said that it expected revenue growth and gross margin to bottom in the fourth quarter and "begin to moderate there." If Nike can show it's taking steps to recovery and expects improving performance in fiscal 2026, the stock could move higher on the earnings report. While a turnaround won't happen overnight, the first step is earning investor confidence, and Nike can do that later this month when it reports fourth-quarter results. Before you buy stock in Shopify, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Shopify wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $674,395!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $858,011!* Now, it's worth noting Stock Advisor's total average return is 997% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Jennifer Saibil has no position in any of the stocks mentioned. Jeremy Bowman has positions in Amazon, Cava Group, Chipotle Mexican Grill, Meta Platforms, Nike, and Shopify. John Ballard has positions in Cava Group. The Motley Fool has positions in and recommends Amazon, Chipotle Mexican Grill, Deckers Outdoor, Meta Platforms, Nike, and Shopify. The Motley Fool recommends Cava Group and Kraft Heinz and recommends the following options: short June 2025 $55 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy. 3 Magnificent Stocks to Buy in June was originally published by The Motley Fool Sign in to access your portfolio
