In the last earnings, NKE pulled their guidance, announced inventory is increasing, demand is weak, and punted their investor day!!!
So investor day is going to reset the expectation, reset the bar, which they can beat in future. How far they are going to reset is the question.
Also announced CEO transition and bringing back Hill. The stock rallied on that news, but a word of caution. We saw similar reaction at DG. While CEO’s leadership is very important, even critical for the success, they are not miracle workers and they cannot wave a band and turnaround the company overnight.
NKE dividend is paltry 1.8%, so you are not getting paid to wait. I would wait until the investor day and a quarter results after the investor day.
SBUX sales disappointing and they are withdrawing their guidance. Remember when SBUX got the ex-Chipotle CEO the stock made a strong move from $70’s to $90’s.
Another Iconic brand that requires to rethink its strategy.
@Kingran - In other channels, NKE is approaching the status of Dividend Aristocrat. That means, a company that has grown its dividend for 25 straight years. Reach that mark, and there will be some interest.
My thinking, Nike just needs a new, good, brand associate to revive something like “It’s gotta be the shoes”
Not unless they fix the business, which at this point is a question.
About 3-4 years ago they abandoned a bunch of retailers, big and small. Everything from Macy’s and Dillards to Boscovs to Urban Outfitters and DSW (and a dozen more). At the same time they quit selling to thousands of Mom & Pop stores across the country, which were training grounds for Youth League soccer & other sports.
The big guys just took that shelf space and gave it to other brands (Adidas, Reebok, New Balance, etc.) and the Mom & Pops did the same, or went out of business. (I bought store fixtures from one of them here and go to know the owner, so I know the story a little better than some.)
They created massive badwill in the retail channels in order to grab a few points of margin, which they did, but now their brand isn’t carrying the same weight as it did. Meanwhile the other guys have stepped up with new features (if not the same scale of endorsements) and I think Nike has a tougher pull now. The brand is still stellar, of course, but there’s more to it than that so it’ll be interesting to see how the new CEO tries to find a new rabbit in an old hat. It happens. And sometimes it doesn’t.
I think it remains to be seen whether “shoes” and particularly “sports shoes” sell the same way as other on-line products. I would think people want to touch & feel, try on, but maybe that’s just me. (There are still a few retail channels: Dick’s is one, for instance). It’ll be interesting to see what happens here. Still a big, important company. No longer really the only game in town.
