) to neutral from buy.
Analyst Virginia Genereux says the fourth-quarter fell short of positive expectations; the 92 cents earnings per share was 3 cents below her estimate. She notes a 10% fall in futures implies a 50%+ drop in orders from Foot Locker. Genereux says it's premature to say Foot Locker's relationship with Nike is getting worse, but doesn't appear to be getting better.
She notes the 2004 outlook is back-half loaded -- a lot of things could happen between now, then, especially given the fashion orientation of athletic footwear and apparel. Genereux says Nike is no longer cheap relative to the market and its peers, and she doesn't see multiple expansion in the first quarter. She cut $3.23 fiscal 2004 (May) earnings per share estimate to $3.18.