Research archive for NKE

Nike has been a rather disappointing investment for the last few years. It soared during Covid because people wore athleisure clothes while working from home, and there was a sudden surge in people wanting to get fit. Since then, a mixture of market changes and corporate blunders has seen its share price struggle. Over the last five years, it is down 24%. At the end of 2021, it was trading at $180 a share, it is now at $77, after bouncing off a recent low of $68.

I read an interesting report on the state of sportswear, and where it's headed in 2025. Here's my takeaway:

Foot Locker is expanding Nike's Home Court basketball zones to 100 stores around the world by 2026, a move to repair their strained partnership after Nike shifted focus to its own stores in 2021, and online purchases inside the Nike app.

Nike is the worst-performing Vestact stock over the last few years. We are waiting patiently for a turnaround.

When you own a portfolio of around 15 stocks, the chances of them all doing well at the same time is small. Especially if they operate in different sectors and geographies.

Nike is currently the worst-performing Vestact-recommended stock. It's down 21.5% year-to-date and has halved since November 2021. What a stinker!

Last week, Bill Ackman's Pershing Square announced that they had accumulated 3 million Nike shares. That sounds like a lot, but it is only 0.2% of Nike's outstanding stock. As a result, Nike's shares have risen 10% over the last week.

Shares of Nike fell 20% on Friday after the company said it expects sales to decline in the year ahead. The athleisure market leader reported earnings per share of $1.01 for the quarter, compared to the 83 cents that analysts expected. But its revenue fell short and the management team was not sufficiently positive about the near-term future.

On Friday, Bright highlighted the fact that Nike has struggled recently, and that the company will need to up its game if it is to compete successfully against a slew of newer athleisure brands. I'm a fan of the ON brand, the shoes stand out and look comfortable, although I don't own any yet. Time will tell if the company has what it takes to become a truly global contender, and if they will still be relevant after this fashion cycle.

I read a very detailed report by Business of Fashion on the rise of sportswear challenger brands, and here's my takeaway on the matter.

Nike is going through a bad patch, and its share price has done very poorly. It hit an all-time high in November 2021, but has almost halved since then. After a good pandemic, when many people took up jogging, sales have moderated and inventory challenges have persisted.

Nike reported its latest quarterly earnings on Thursday night. Revenues were a little soft, up only 2.0% compared to last year, at $12.9 billion. Profits were much better than expected and inventories of unsold athletic gear declined nicely. As reported above, the stock price rose sharply on Friday.

On Thursday evening Nike reported mixed results. Revenue was higher than expected, thanks to a strong rebound in Chinese sales, but profits were lower than hoped for and forward guidance was weak. Nike shares dropped by 2.7% on Friday, and are now down 7.1% for the year.

Michael Jordan's Air Jordan 13 sneakers (pictured below) that he wore during the 1998 NBA Finals, aka "The Last Dance", just sold for a record-breaking $2.2 million! Thank you collectors for increasing the value of my AJ13s.

We always write up the results of our recommended companies in detail. Nike reported quarterly numbers this week that came in well ahead of expectations. Sales rose by 14% to $12.39 billion for the three months. They also raised their revenue growth target which bodes well for the year ahead.