Late Stage Capitalism
Physician, Long-Term Stock Investor with 30 Years of Experience
Nike has a quality problem and a relevance problem, made worse by no longer having Michael Jordan on the court. Under Armour sneakers at $50-70 can be more comfortable than $150 Nikes. Per a quoted post, Nike's direct sales fell 8%, digital 13% and wholesale 1%, and management's answer is $2.5 billion of cost cuts. x.comÂ
Nike sells expensive products of poor quality, which no longer works after 2010, when brands must offer either cheap goods or expensive quality. Gen Z and younger consumers care far less about the brand than 1980s and 1990s kids did, and the stock is back at 2014 levels, a decade erased. x.comÂ
Nike is still super expensive even if it pulls a magic trick on margins, and the stock has been a buy-the-dip nightmare because the brand became uncool. It can keep existing while slowly fading, which is a terrible investment case. x.com x.comÂ
Nike looks undervalued, with turnaround potential at its highest just as fundamentals and sentiment are at their worst. The Cryptic Bottom Index is in a region that has historically aligned with some of Nike's biggest macro bottoms over the past 30+ years. Cutting prices and rebranding as a more affordable brand, along with replacing marketing leadership, would be the catalyst for a fundamental turnaround. Continued deterioration toward bankruptcy is possible but a low-probability outcome. x.com … Show more
Nike destroyed its brand with its direct-to-consumer push during Covid, one of the dumbest strategic mistakes by any megacap. Pulling Nike shoes from stores let consumers try On, Asics, Hoka, New Balance and others. Nike is not dead, but it may not be able to put the genie back in the bottle. Its latest report, per @HeyAlvaAI, showed Nike Direct sales down 8%, Greater China down 22% and a forecast high-single-digit revenue decline for the year. x.comÂ
Nike just can't compete the way it used to: it no longer captures the market it once did, and that clearly isn't changing any time soon. The post-earnings reaction went as expected, with the stock already at its lowest since 2014 going in. x.com x.comÂ
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.comÂ
Nike's decline is driven by consumers seeking higher-quality clothing while it clings to profitable polyester-based products. Its refusal to adapt has allowed many competitors to succeed; Nike's demise is underway, and its stock continues to plummet. x.comÂ
Nike's guidance for a high-single-digit revenue decline in fiscal 2027 is all investors need to know. x.comÂ
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.comÂ
Nike is a laggard not worth watching, because it is no longer a popular brand in Asia. Replying to @degrotepuinhoop, who sold amid ongoing selling pressure. x.comÂ
