Research archive for NKE

Yesterday I referred you to Ben Evans' annual tech presentation. There was a slide there about one of our core holdings that I want to discuss today. The graph below looks at Nike's sales mix. The grey portion reflects sales to third parties like Foot Locker or Sportsmans Warehouse. The red portion reflects their direct-to-consumer (D2C) sales through their website and Nike stores.

Nike's quarterly results are out of sync with the rest of the market; they don't come out in the usual earnings season. Last night they released their latest set of numbers, beating Wall Street's profit and revenue estimates. Unfortunately, the share price is down in after-hours trade due to weak guidance for the next few months. China's Covid lockdowns and supply-chain snafus continue to plague the company.

What's happening with earnings of big companies for the second half of 2022? Analysts have reduced their guidance slightly, warning that a general slowdown might cause profit margins to contract. No one seems sure what to expect. We will soon get reports for the quarter ending September.

Last week, Nike shared a letter from its founder Phil Knight. In which he celebrated the 50th anniversary of a make-or-break moment in the history of the apparel maker. On 1 May 1972, Onitsuka, the Japanese shoemaker whose shoes Knight had been selling in the US, cancelled their contract.

Nike released excellent quarterly results on Monday night. Before we take a closer look at those numbers I want to review the last few years of Nike's share price movement.

Nike has announced the acquisition of RTFKT (pronounced "artifact") Studios as the sneaker giant steps into the metaverse. This design studio is behind the NFT project called CloneX which has made over $65 million in transaction volumes in just three weeks.

Gaming is already huge around the world. What do you do if you manufacture goods in the real world and want to hawk products to gamers? Create a virtual world, of course. That's exactly what Nike has done on the Roblox gaming platform.

Sotheby's is selling Michael Jordan's earliest-known worn pair of Nike Air Ships. The sneakers are the earliest regular-season pair of Jordans to come to the market and are expected to make history in the secondary sneaker market.

When a company goes through a tough patch there's an important question to ask: is the issue internal, or is it a result of general business conditions? Nike's current supply challenges are a good example. After Nike released results last week the share price dropped by 6% because they were experiencing production and distribution problems that will affect future profits.

Nike had quarterly results out on Thursday evening, and to my surprise they were weaker than expected. Sales were only up 12% to $12.2 billion, but Wall Street analysts were forecasting $12.5 billion.

Who won the Olympics? I'm talking about the shoe manufacturers, not the athletes. If you look at the medal tally from all running events, of all distances and the triathlon, but exclude the field events, then Nike had 10 times the number of gold medals to its nearest competitor, and five times the total medal count to the nearest rival Adidas. The medal tally info was gathered by Bartold Clinical, an online sports medicine education platform with a focus on the lower limb and athletic footwear.

To celebrate all the wonderful sport happening at the moment, I thought I would feature this cool story about a pair of track spikes, handmade by Nike co-founder Bill Bowerman, which could fetch $1.2 million at an auction.

Nike released blockbuster fourth-quarter numbers and the sneaker King printed record revenues in its biggest market, North America, where sales more than double to $5.38 billion. The Nike share price liked the news and is up 14.1% in early trade. This reverses Nike's 5.9% Dow index underperformance year-to-date.

I read an analyst report yesterday which described the athletic equipment business as being "on fire right now". In other words, sporting gear is selling well. More than ever, people need to get outdoors and get some exercise.

Sneakers have gone from being used as utility gear for different sports, like basketball and running, to being collectable items. This goes as far back as 1985, when Nike dropped the iconic Air Jordan 1s, a shoe that helped put Nike on the map when it comes to the sneaker game.