Research archive for NKE

Nike is going through a bad patch, and its share price has done very poorly. It hit an all-time high in November 2021, but has almost halved since then. After a good pandemic, when many people took up jogging, sales have moderated and inventory challenges have persisted.

Nike reported its latest quarterly earnings on Thursday night. Revenues were a little soft, up only 2.0% compared to last year, at $12.9 billion. Profits were much better than expected and inventories of unsold athletic gear declined nicely. As reported above, the stock price rose sharply on Friday.

On Thursday evening Nike reported mixed results. Revenue was higher than expected, thanks to a strong rebound in Chinese sales, but profits were lower than hoped for and forward guidance was weak. Nike shares dropped by 2.7% on Friday, and are now down 7.1% for the year.

Michael Jordan's Air Jordan 13 sneakers (pictured below) that he wore during the 1998 NBA Finals, aka "The Last Dance", just sold for a record-breaking $2.2 million! Thank you collectors for increasing the value of my AJ13s.

We always write up the results of our recommended companies in detail. Nike reported quarterly numbers this week that came in well ahead of expectations. Sales rose by 14% to $12.39 billion for the three months. They also raised their revenue growth target which bodes well for the year ahead.

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.