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Nike pushes sports bras as it hopes to boost worldwide sales

Brian Sozzi
Editor-at-Large

Nike (NKE) is all in on sports bras.

The sportswear king told Wall Street analysts on a conference call Thursday it will debut 40 new styles of sports bras over the next year. Nike is fresh off what it calls an “amazing start” to the fourth quarter launch of plus-size sports bras.

Most of the new styles, according to Nike, will focus on a range of new sizes up to 44G. Nike says it will outfit more of its bras with the technology in the FE/NOM Flyknit line.

“We see [bras] market share up for grabs given the increasing fragmentation of the intimates space, particularly given our work around L Brands,” says Jefferies analyst Randal Konik.

Nike took the sports bra business by storm in 2017, introducing the FE/NOM Flyknit bra. It weighs a mere 73 grams, or about 30% less than other bras in the Nike portfolio.

The push into sports bras is one part of Nike’s goal to reach $11 billion in sales from its women business by 2020. In 2015 when the company relayed this goal to Wall Street, it had about $5.7 billion in annual sales of women’s products.

Brandi Chastain in a Nike sports bra as she celebrates her game-winning shootout kick for the U.S. team against China. (AP Photo/Eric Risberg)

Nike’s sports bra business did its small part to boost the company’s third fiscal quarter results. Sales increased 7% from the prior year to $9.6 billion, fueled by gains in all geographies where Nike does business. Earnings came in at 68 cents a share versus analyst estimates for 65 cents a share.

Shares fell 4% in pre-market trading Friday as Nike saw slowing profit growth across its geographies. Analysts were also disappointed with sales in North America.

For a company valued at a premium price-to-earnings multiple relative to the broader market — and especially compared to other retailers — shortfalls of any kinds will be punished.

Explains Konik, “The athletic footwear cycle and brand power are solid. Nike’s business is strengthening in North America, and we expect the company to continue to recapture the share it has lost to Adidas. However, we find valuation expensive versus peers, and we see Foot Locker as a better way to play Nike’s resurgence.”

But hey, that sports bra business isn’t looking too bad, Wall Street.

Brian Sozzi is an editor-at-large at Yahoo Finance. Follow him on Twitter @BrianSozzi

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