Roger
Business Owner, Former Assistant Research Professor
Nike's plan to shut a substantial part of its Beaverton, Oregon campus and move work to Singapore and India makes it a strong buy candidate now. Too much money was being spent on US employees doing a poor job designing and marketing the brand. Keeping only a few executive roles in the US should let Nike win big by moving overseas. x.com
Nike's guidance signals a Trump-driven recession and collapsing consumer demand, pointing to years before any turnaround. It guided revenue down 9% even with heavy discounting and EPS down 33%, effectively calling for consumers to collapse in 2027. Price hikes are also hurting, and unlike On, which targets richer consumers, Nike sells to buyers who cannot afford clothes. Baird expects a big selloff as investors finally reset expectations. x.com x.com x.com x.com x.com x.com x.com
Nike's brand concerns look priced in; stabilization, not sudden revenue acceleration, is what the speculative long needs. A few good campaigns and a return to large stores could help, though China consumers will be a drag. Short-term EPS is a poor indicator, and customers may return after trying other brands. x.com x.com
Nike's push to reposition as a premium sports brand looks like the right route to recovery, including in Greater China. New CFO Dave Denton was clearer, and Alex Arnault's board seat, Jordan's return to scarcity, elite athlete deals and less discounting support it. EPS was fairly strong and margins are improving; guidance looks set deliberately low to beat, since management says the decline largely stems from its own choices. The dividend is safe; a full turnaround may take 3-5 years. x.com … Show more
Nike's latest report confirms a structural unwinding, not a temporary dip, despite the EPS beat. The $0.48 versus $0.44 beat came from expense cuts, a lower tax rate and a lowered bar, while revenue missed and management warned of a high-single-digit full-year sales decline. NIKE Direct fell 8%, digital 13% and owned stores 5%, Greater China plunged 22%, and consumers are fleeing to On, Hoka and Adidas. Cost cuts can't restore cultural heat, and earnings power looks halved. x.com
Nike is at an inflection point, with revenue growth poised to reaccelerate in the second half of 2026 as it moves past franchise management and inventory liquidation. The bigger story is margin recapture: over 500 basis points of lost operating margin can return via more full-price selling and SG&A leverage, helped by well-received new products. The December 2026 target is $86, about 33x revised CY27 EPS of $2.56. Risks include currency swings, weaker consumer spending and Vietnam trade policy. … Show more
Nike could re-rate aggressively if it finds a way to re-accelerate growth, which makes it start to look attractive here. China is still a problem, and the dividend yield is now 4.3%. x.com
Nike might not bottom until it cuts or eliminates its dividend, since net income is down 75% over five years and it cannot afford the payout. This could be one of the hardest turnarounds ever: it is getting clobbered on all fronts, China won't be coming back soon, products need a serious makeover and it overpays too many pro athletes. It needs to preserve cash, bring in new people and ideas, and find a way to bring excitement back to the brand. x.com x.com
Nike's dividend yield, now high versus its ten-year history, is the new question for investors and makes the stock very interesting at these levels. The numbers have not bottomed, guidance was atrocious and parts of the business are getting worse, offset somewhat by better US wholesale. The guidance implies Nike will use some cash to fund the dividend, but it has plenty. The stock remains too expensive on earnings and too cheap on dividend yield. x.com x.com x.com x.com x.com
Nike's valuation pays investors to wait for a turnaround that will take longer than expected. It trades at just 16x earnings, near its lowest valuation ever, with a roughly 5% dividend yield, and would need a 127% rally to regain its 200-week moving average. Revenue is projected to fall another 4% in FY2027, but the business will grow again; the market prices it as if it were disappearing. Unlike Novo Nordisk, Nike faces no patent cliff. x.com x.com
Nike's fundamentals have not yet followed, and insider buying by CEO Elliott Hill and board member Tim Cook did not fix the business. Q1 revenue fell about 4% to $11.2B, with China down 26%, Nike Sportswear down low double digits and Jordan down mid-teens. Management warned China could get worse and some turnaround pain could extend into fiscal 2028. Performance grew high single digits, running double digits and North America returned to growth, so Nike is not being written off. x.com
Nike under $40 is getting very interesting because expectations have fallen so low, often where the best risk/reward shows up. The stock closed at its lowest since 2014, about 78% below its all-time high. The turnaround is not finished: FY26 revenue was basically flat, Nike Direct is still shrinking and China remains a major problem. But wholesale revenue grew 6% for the year as Nike rebuilds retailer relationships. This is not a call on the bottom. x.com
