NEW YORK (AP) — Ongoing weakness in Western Europe and the continuing oversupply of clothing in China is likely to pressure Nike's results, an analyst said Thursday.
Sam Poser of Sterne, Agee & Leach said in a client note that the oversupply in China will probably mean fewer future orders from the country. The analyst says China's turnaround could take "multiple quarters" and is concerned that by the time that happens strong growth in North America may start to slow due to more difficult comparisons.
In Europe, Poser feels that the soft economy and a post-Olympic and post EU Championships environment will likely pressure future orders there.
"While the organizational realignment in Western Europe is a step in the right direction, we believe that such moves take many quarters to bear fruit," the analyst wrote.
But Poser still anticipates strength in Eastern and Central Europe and in emerging markets.
He maintained a "Neutral" rating for Nike Inc., which is based in Beaverton, Ore.
Nike Inc. is expected to report its third-quarter financial results on March 21.
Nike shares slipped 25 cents to $54.60 in premarket trading.
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