Nike Inc (NKE)

Sold it 18 months ago. Didn't like inventory levels and weak sales growth. They changed the CEO in 2021 and nothing's gone right. Wasn't pleased when they sold directly to consumer and moving away from wholesale--this allowed competitors to take shelf space. The PE is now a reasonable 20x though and it can grow globally. He expects a new CEO which may inspire investors.

Sold on concerns about recession and slower consumer spending. When people tighten their belts, #1 thing to go is clothing and shopping. Little pop recently. Great brand, but struggling. 19x future earnings, cheapest in a decade, but wait for conviction on a turnaround recession-wise. Be cautious. If you own it, hold.

Biggest issues are sluggish sales in China, plus retail strategy to sell through website and branded stores rather than third-party outlets.

He sold some time ago. He struggled with its ability to connect with the younger generation. World leader in so much stuff. Probably a value play, he wouldn't say not to buy. 

But he'd prefer to pay more, knowing it has more momentum behind it. He'd wait until metrics start to improve, showing that its lustre had come back.

Difficult quarters recently. Recent earnings misses. Strong brand power. Concerns on valuation. A leader in its space. Slower revenue growth; this would have to change for him to be interested. If you own it, hold; but don't add now.

Can't beat it as a brand. Issue has been poor execution. Once they get that sorted out, has great products to offer. Olympics should help.

Excellent company with very strong brand. Has sold shares, but will wait to buy back in. Ability to generate new products is incredible. Would hold shares for 5 years. 

You cant' just blame weak sales in China, because US sales are down too.

One of the worst performers, down 33% on the year, 52-week low. She sold a while ago, took a small loss. Unlikely to fall much further. 19x forward PE. Pressure in the space, sluggish sales in China. Cutting costs. Still has strong branding, global market share of nearly 40%.

Likes the company, watches it. She'd wait for confirmation of a turnaround before getting in.

It's temping to buy on such weakness, but the company hasn't owned it to what's wrong with it. Something's gotta change.

Is there any hope? After its last recent report, shares plunged 20% to march 2020 Covid levels. It still isn't rebounding, but still falling today. Sales were -2% YOY from weakness in North American and EMEA, though sales in China were actually +3%. They beat earnings though largely from cost cuts. Overall, it was a mixed quarter, but the forecast was grim, with a 10% sales decline. Their return to sales growth will take a long time.

He owned it but sold. It seems to be losing its brand image and a company from Switzerland is gaining market share. The stock is down so it will be a value candidate for a while. Wait for signs of a comeback before buying.

Is plunging nearly 20% after reporting and on weak guidance. Expectations were incredibly high. New products and lower inventory were supposed to happen in the second half, but are now pushed into 2025. Also, revenue growth has fallen (projected) from high-single digit to low. It will take a while to right this ship.

Is plunging 20% today on weak guidance. Is down 40% and their multiple is cut in half and their chief product officer left. They moved away from their core business--athletic leisure to back-to-work. He prefers LULU, which at 20x PE trades lower than Nike. Believes in LULU's management and positioning.

EPS of $1.01 beat estimates of $0.84 and revenues of $12.6B missed estimates of $12.89B. Sales declined 2% year-over-year, but its gross margins expanded 1.1% to 44.7% for the quarter. Management noted it is addressing near-term challenges head-on, and guidance was updated to reflect FY2025 revenue to be down mid-single digits, with the first half falling by high single-digits. Several analysts downgraded the name, but historically NKE has shown resilience during economic downturns. 

We certainly do not like the negative momentum here, and from its peak in 2021 it is now at a 55% drawdown. This is a slightly worse drawdown than in 2009, and slightly better than its drawdown from 2000. It is still trading at a fairly high forward P/E of 22.5X, considering the large drawdown, but for a long-term hold, we see this name as having potential to recover eventually. But this process could take several years, and for now we would prefer to wait until its price has settled and found an area of support.
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