Nike Inc (NKE)

They lacked the technological innovation to drive the brand into different, younger markets. They were complacent.

It reports Thursday. It's too early to enter this. The company was so messed up before the new CEO started a year ago. It's been that tough to turn around.

He did his "down from cost" review, and found that his turnaround thesis had changed. Three things limit upside. Tariffs. Structural changes in the Chinese business that will be difficult to overcome. Anti-American sentiment. He used the Q1 rally to exit.

It reported a solid quarter and shares jumped 6% today. The stock was lost under its previous CEO, but nearly a year ago they brought back a former executive to grow the business. He started a position in this last week. Their quarter: revenue and EPS beat. North America was particularly strong, though China remains a problem. Gross margins also beat, despite shrinking. Listening to customer feedback, they are redesigning their biggest franchises and brands. Shares jumped 20% in Q1. Also, they are selling directly on Amazon for the first time since 2019. Caveats: turnaround take time, something the CEO warns of. All told, he expects shares to reach $100.

They report Tuesday. Elliott Hill is the new CEO, whom he respects. Not sure if this will be the breakout quarter, but there will be one, and you should buy this ahead of time.

Pretty cautious on consumer names, since we're about mid-late cycle economically. Interest rates coming down might help the consumer. Stocked popped on optimism around the turnaround story. 200-day MA trend continues lower. Tariffs are an issue. Premium at 45x forward PE for 15-19% EPS growth.

In the consumer space, he'd prefer names like DOL or TJX. Downshift in spending going on now.

The largest sneaker company in the world. Almost zero debt. Are still buying backs shares and paying dividends. They changed CEOs and ditched his distribution strategy. ON is a competitor, but Nike has the money to produce competitive products. Are cleaning out past inventories which will impact the next few quarters, but earnings should double in the next few years. Shares are cheap now.

It's a long-term turnaround. A lot of damage has been done and many competitors came in, like New Balance and Hoka. Ultimately, things will work out.

Good news is it's the largest in athletic wear and shoes. No debt, tons of firepower. Industry leader. Slow fixes from horrendous mistakes. Looking for earnings improvement in 2026. Worst is over. To bring manufacturing back to the US would be way too expensive for this type of company.

Nike has lost its edge. ON is a better company, and Nike's peers aren't standing still as Nike turns around.

It has had a big fumble and he doesn't know if they can recover. They took products off the shelf and competitors are in there and gaining market share.

Hold, if you already own. Maybe earnings will accelerate, but it's expensive now. Good CEO. Buy if it falls to the low $70s.

Added recently around current level of $77. Online push didn't work; it can be part of the business, but not the main part. New CEO has gone back to basics. Huge FCF, minimal debt. Incredibly well positioned. Chance to buy on sale the world's best business in the sector.

Trades around 20x PE. Options: implied volatility is over 30, so you're paid twice as much as the broader market. Because the stock has been under pressure for a long time, these options are more expensive than others. Currently, at May $70 puts you can get $3.90, an attractive 5% return if shares stay flat over 3 months. 

Its peers are coming back, but Nike has a tough road ahead. Is -31% the past year. It looks cheap, but it will take several quarters for the activist investor to improve the company. It's dead money for 3-6 months.