Please ensure Javascript is enabled for purposes of website accessibility

Why Nike Stock Lost 11% in October

By Demitri Kalogeropoulos – Nov 7, 2018 at 9:42AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The high-flying stock got caught up in spiking market volatility last month.

What happened 

Sports footwear and apparel giant Nike (NKE -0.99%) trailed the market last month by shedding 11% compared to a 7% decline in the S&P 500, according to data provided by S&P Global Market Intelligence.

^SPX Chart

^SPX data by YCharts.

The drop did little to take away from shareholders' longer-term returns, though, as Nike's 20% gain so far this year far outpaces the market's 3% uptick.

So what

With no significant news coming out of the company last month, the stock-price slump wasn't a reaction to any specific Nike trends. Instead, shares were apparently caught up in a broader market drawdown that was especially hard on stocks like Nike, which had seen market-thumping gains earlier in the year.

A jogger laces up his shoes.

Image source: Getty Images.

Now what

Nike is entering a holiday-season period that's critical to management's wider growth targets. If all goes to plan, the retailer should announce faster growth in fiscal 2019, along with its first gross-profit-margin increase in three years. Successes here are allowing the retailer to speed up investments in its attractive direct-to-consumer business, which, in turn, should pave the way for higher sales well into the future. Investors are better off focusing on those operating trends and doing their best to ignore short-term pricing swings like these.

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

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

NIKE, Inc. Stock Quote
NIKE, Inc.
$96.06 (-0.99%) $0.96

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.