Nike and other retail stocks downgraded as Jefferies warns of spending slowdown

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As student loan payments return, Jefferies warned stores like Nike and Foot Locker could see a slowdown as. consumers curtail spending.

) all to Hold from Buy and slashed the price target on each. For example, roughly one-third of respondents said they'd plan to shop less at Urban Outfitters due to the return of loan payments, while Nike and Foot Locker's footwear sector is one of the most exposed to a consumer slowdown due to student loan repayments, according to Jefferies survey.

Importantly, Jefferies flagged that these companies already had other headwinds weighing on their businesses. Foot Locker's turnaround strategy Meanwhile, at Urban Outfitters,Anthropologie, a segment of its business, reported same store sales up 51% in the second quarter but the initial flagship Urban Outfitters brand saw sales decline 56% in the same quarter.

Jefferies also sees the return of student loans negatively impacting Nike. There could be wholesale issues if a store like Foot Locker — where Nike makes up more than 60% of the company's sales — sees a decline.

 

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