A slew of footwear retailers were falling Friday after an analyst said athletic shoe sales promotions are running riot in the nation's shopping malls.
Following four years that were relatively free from sales promotions, athletic footwear has seen "rising discounts at retail" among certain key styles, according to Bank of America's Robert F. Ohmes.
The analyst downgraded Foot Locker Inc. (NYSE: FL) and Finish Line Inc. (NASDAQ: FINL) to Under Perform, from Neutral on Friday. Ohmes cut his Foot Locker target 16 percent to $50 and his Finish Line target 24 percent to $22.
Finish Line Chief Executive Glenn S. Lyon said the company will adjust short-term capital spending "to protect profitability until stronger full-price selling trends emerge.”
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In another footwear development, Nike Inc. (NYSE: NKE) said Thursday that its futures orders were running 7 percent higher than a year ago, versus the 11 percent growth it reported in September.
Apart from discounting, Ohmes said the sector could slow down in light of fewer inspiring new styles on the horizon from manufacturers.
"Retailers will be relying on better allocations of current styles rather than new technical platforms to drive same-store sales growth," Ohmes said.
Moreover, quarterly growth comparisons will become increasingly difficult in 2015, even as so-called technical running brands like Nike Free and Luna are slowing down, Ohmes said.
Finish Line fell more than 18 percent to $23.53 recently, while Foot Locker was off nearly 7 percent on Friday.
Latest Ratings for FL
| Dec 2014 | Bank of America | Downgrades | Underperform | |
| Sep 2014 | Bank of America | Downgrades | Buy | Neutral |
| Sep 2014 | JP Morgan | Maintains | Overweight |
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