Make Nike Great Again? Nope! You can hope it will happen, but I am not optimistic for the following reasons 1) They are selling a commodity. Sneakers are easy to copy and hard to meaningfully differentiate. Early on, Nike had a differentiated product based on the shoe’s performance for runners. This has been completely competed away. 2) Nike’s other source of differentiation was the magic of Mike and the superstar athlete brand association. This has also eroded and now Nike must compete with other brands to sign the superstars and the star athlete lifestyle association is no longer unique. So at this point Nike is a turnaround story where at best they out-execute competitors long enough to get a couple good quarters and temporary price pop. The only long term tailwind is that eventually people will begin to realize how ridiculous Hokas look no matter how well built you are. Bottom line Nike is at best a trading vehicle.
It makes me wonder what a strong brand really means and the foundation that supports it. For example Coke’s foundation is their unique recipe and taste. With Nike I am not so sure anymore.
So true. The name recognition gets them the distribution channel. The problem is there are several competitors right next to them in the stores, so pricing power gets challenging.
We have an anything but Nike motto when shopping for clothes and shoes. They destroyed their brand with their woke ambitions. A company cannot call Americans bigots or racists then expect Americans to buy your brand. Nike, Disney and Bud Light suffered the same consequences because they chose to attack their own customers and because they each have competitors that are an easy replacement. Target did it too, but they learned their lesson and they walked away from the woke swimsuits and their stock is recovering and their customers started coming back. These companies might think they only have to cater to coastal elites and hedge fund owners, but all the rest of the country has their vote in what they do and don’t buy.
One anchor from the latest 10-Q while blame is assigned: revenue $11.0B, down 1% Y/Y, North America $4.8B - 44% of it. Net income $1.1B, a 9.7% margin, up 407% Y/Y. The filed shape is flat revenue, recovering margin.
This is a great example of what is so pervasive in the final or late stages of a bull market. Overvaluation ! Paying too much can be ruinous. You can do everything else right, but buying at an extreme valuation ruins the investment for a decade or several years at least. Better to wait, or at the very least, dollar cost average into something that is so expensive. When you fall in love with a stock and overpay you risk being stuck for years in a business going nowhere. Investors have to be disciplined. Success depends on it.
Make Nike Great Again? Nope! You can hope it will happen, but I am not optimistic for the following reasons 1) They are selling a commodity. Sneakers are easy to copy and hard to meaningfully differentiate. Early on, Nike had a differentiated product based on the shoe’s performance for runners. This has been completely competed away. 2) Nike’s other source of differentiation was the magic of Mike and the superstar athlete brand association. This has also eroded and now Nike must compete with other brands to sign the superstars and the star athlete lifestyle association is no longer unique. So at this point Nike is a turnaround story where at best they out-execute competitors long enough to get a couple good quarters and temporary price pop. The only long term tailwind is that eventually people will begin to realize how ridiculous Hokas look no matter how well built you are. Bottom line Nike is at best a trading vehicle.
It makes me wonder what a strong brand really means and the foundation that supports it. For example Coke’s foundation is their unique recipe and taste. With Nike I am not so sure anymore.
So true. The name recognition gets them the distribution channel. The problem is there are several competitors right next to them in the stores, so pricing power gets challenging.
We have an anything but Nike motto when shopping for clothes and shoes. They destroyed their brand with their woke ambitions. A company cannot call Americans bigots or racists then expect Americans to buy your brand. Nike, Disney and Bud Light suffered the same consequences because they chose to attack their own customers and because they each have competitors that are an easy replacement. Target did it too, but they learned their lesson and they walked away from the woke swimsuits and their stock is recovering and their customers started coming back. These companies might think they only have to cater to coastal elites and hedge fund owners, but all the rest of the country has their vote in what they do and don’t buy.
Nobody outside the USA wants Nikes anymore because of MAGA. Has nothing to do with anything else. Everybody starts buying Adidas.
One anchor from the latest 10-Q while blame is assigned: revenue $11.0B, down 1% Y/Y, North America $4.8B - 44% of it. Net income $1.1B, a 9.7% margin, up 407% Y/Y. The filed shape is flat revenue, recovering margin.
Nike, Snapchat and Spotify are all American icons that are facing a collapse of their price all for separate reasons
Why do you continue to refer to Nike as a great business?
This is a great example of what is so pervasive in the final or late stages of a bull market. Overvaluation ! Paying too much can be ruinous. You can do everything else right, but buying at an extreme valuation ruins the investment for a decade or several years at least. Better to wait, or at the very least, dollar cost average into something that is so expensive. When you fall in love with a stock and overpay you risk being stuck for years in a business going nowhere. Investors have to be disciplined. Success depends on it.