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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.
To turn its fortunes around, Nike appointed a new management team last year. They seem to be working hard at mending relationships with the company's wholesale partners. Nike's previous set of results were better than expected, but the new CEO warned that things would worsen before they get better. If you were in his position, you'd probably say that regardless of the business trends.
An exciting partnership was announced on Tuesday. Nike is joining with Kim Kardashian's Skims brand, to create a new product line called NikeSkims. It will include training apparel, footwear, and accessories.
Some clients have called it quits on their Nike holding, others have decided to give the new management team a few more quarters to see if they can turn things around. It's too early to know how this will end, but Nike is a very strong brand, so I think you have to back them to stop the slide of the last two years.
