Canaccord Genuity on Consumer & Retail/Footwear and Apparel: Does the NBA Lockout Really Matter?
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Price: $24.01 --0%
Rating Summary:
16 Buy, 25 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
16 Buy, 25 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Canaccord Genuity on Consumer & Retail/Footwear and Apparel: Does the NBA lockout really matter?
Canaccord analyst, Camilo Lyon, said, "Now that the first two weeks of the NBA season have been cancelled as owners and players negotiate on the same topics today as they did during the last lockout in 1998-1999 (e.g., salary cap, pay scales, revenue splits), we believe this is where the similarities end. We believe the athletic retail environment that coincided with the 1998/99 lockout was vastly different than today’s. As such, we believe the overhang on the retailers with exposure to the basketball category, in particular Foot Locker (NYSE: FL) and The Finish Line (Nasdaq: FINL), is unwarranted. We reiterate our BUY ratings on both FL and FINL. Excess inventory that carried over from the 1996 Olympics resulted in heavy promotional and markdown activity in 1997, and not surprisingly hurt the category. Moreover, we believe a majority of the discounting centered on licensed and branded apparel, which negatively impacted comps to a larger degree relative to footwear. In fact, we believe footwear comps held in well and were flat to positive during the height of the NBA lockout. In our opinion, the risk to the sector is more present for the licensed apparel business than for footwear."
Canaccord analyst, Camilo Lyon, said, "Now that the first two weeks of the NBA season have been cancelled as owners and players negotiate on the same topics today as they did during the last lockout in 1998-1999 (e.g., salary cap, pay scales, revenue splits), we believe this is where the similarities end. We believe the athletic retail environment that coincided with the 1998/99 lockout was vastly different than today’s. As such, we believe the overhang on the retailers with exposure to the basketball category, in particular Foot Locker (NYSE: FL) and The Finish Line (Nasdaq: FINL), is unwarranted. We reiterate our BUY ratings on both FL and FINL. Excess inventory that carried over from the 1996 Olympics resulted in heavy promotional and markdown activity in 1997, and not surprisingly hurt the category. Moreover, we believe a majority of the discounting centered on licensed and branded apparel, which negatively impacted comps to a larger degree relative to footwear. In fact, we believe footwear comps held in well and were flat to positive during the height of the NBA lockout. In our opinion, the risk to the sector is more present for the licensed apparel business than for footwear."
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