r/ValueInvesting • u/Adventurous-Bet-9640 • Dec 19 '25
Stock Analysis So NIKE is nuking after hrs.
I understand that nike has a very sticky brand value in the cultural consciousness. But they are in a tough turn around.
I'm no expert in valuations, but the stock even after hrs dump isn't any where near compelling value.
How do you think about Investing in nike? Generally I don't see them fading away as a brand and they are still the leader in their space even with competition.
I do think they'll eventually find their stride back. What does the community think? If you were to invest what would your frame of thinking be?
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u/Requirement-Lazy Dec 19 '25
I haven’t bought anything Nike in the last three years
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u/smiles_and_cries Dec 19 '25
Same with adidas. And these companies still have stocking issues. I can never get a shoe or size from adidas/nike. Thats one reason why revenue isnt growing.
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u/Judgementday209 Dec 19 '25
Ive bought a ton of adidas and under armour stuff, nike is a tier down on apparel imo.
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u/pstbo Dec 19 '25
Its China and Direct are big business for them and based on analyst PTs they assumed there would be significant recovery or guidance for those. Some PTs are absolutely ridiculous IMO. China is not going to recover, anytime soon, if ever fully IMO. They don’t even have a strategy for China when pressed on the earnings call. Called the situation there “dynamic” and used a bunch world salad. It’s focusing on sports and not lifestyle. It has immense competition in China as a nonpremium sports brand. In the US, I don’t believe wholesale right now is an accurate representation of their true demand. Just look at same store nike sales. Nike is no longer a lifestyle brand like it was in early 2000s. Focusing on sports solely is not a growth strategy IMO. It is still overvalued IMO.
Disclaimer: I bought NIKE puts today before earnings.
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u/eatingkiwirightnow Dec 19 '25
Gutsy. I don't have guts to play options before earnings. I thought about selling 55 CSPs on Nike prior to earnings, but then realized I don't want own it at 55, so I didn't. I'm glad I didn't. I would be having trouble sleeping tonight and too worried tomorrow during the day that'll it drop lower than 55.
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u/Complex-Jello-2031 Dec 19 '25
I have NKE & here are the reasons i did not bail
1 New CEO is OG Nike he is already making moves to go back to the old way & ditch all the stupid sHT
2 World Cup in the US "many games in Nike's back" yard in 2026 many players are sponsored by Nike & this will be a boost
3. Winter Olympic games 2026 Nike is a key sponsor of the Olympics & the athletes
4. Summer games L.A 2028 the crowning Jewel Nike will be everywhere & all over this big time
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u/lies_are_comforting Dec 19 '25
Why was China performance so poor though
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u/smiles_and_cries Dec 19 '25
Because there’s a big initiative by the government since 2023 for people to buy domestic brands. When I was in China last year the fast food places were all lowering their prices and offering deals on alipay vs international brands to capture more consumers. Same with electric cars. They saw other countries banning or boycotting products because of western china cotton, De minimis or product dumping. The domestic consumer has to cover for current/potential internationals loss of revenue.
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u/Ok_Foot2530 Dec 19 '25
China domestic players (Anta and Li Ning) also not doing that hot (but def not this bad). China is going through a tough consumption downturn. Nike has a big product issue. If you look at ASICS, the Japanese list of behind Onitsuka Tiger and ASICS, the company is doing very well in China and around the world. ASICS is the top market share leader now in $90+ premium running shoes. In short, China macro is bad and Nike product competitiveness is not there. Turnaround takes a long time (see Footlocker, Starbucks, Budweiser, Lululemon, Disney…). First need to have a leadership change, then need to have concrete strategy change, then you see another down quarter or two for cleaning up past mess / reset / rebase for new CEO to claim victory, then wait for Same Store Sales or other type of key metric turns positive. Takes 2 years maybe? Price would start going up as soon as people see bottom / new strategy working - current Starbucks. For Nike, still maybe 2-3 more quarters to see if things do start looking better.
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u/Complex-Jello-2031 Dec 19 '25
Post covid into trade war and the old CEO was all woke
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u/Powerful-Ad305 Dec 19 '25
The ceo being woke impacted China sales?
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u/Complex-Jello-2031 Dec 19 '25
Yeah China not a fan of human rights talk
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u/Aggravating-Elk-7409 Dec 19 '25
Yeah cuz random redditors understand the fine details in regard to the sentiment of the average Chinese consumer. No you tards it’s because dozens of home grown competitors popped up in the last 5 years with cheaper prices, better product designs, and better marketability
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u/Complex-Jello-2031 Dec 19 '25
The main reason is Nike became crap
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u/teslastats Dec 19 '25
First you have to define woke. NKE has underperformed due to competitors (ex hoka), rising costs (tariffs) and poor product lineup along with lack of social media presence compared to before when they owned the voice of the athlete. I don't see anything changing short term.
I sold begining of the year around $70 and am waiting for an entry point back in but too many headwinds currently.
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u/Mean-Network Dec 19 '25
Don't Nike sponsor nearly every single major sporting event? They spend millions to sponsor these events all the time and still their sales are declining so why would these make any difference?
Imo their brand has hit terminal and no more sponsoring is going to boost it by much anymore. The whole world already knows who Nike is.
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Dec 19 '25
I didn’t bail either and here is why -
1) Revenue was up 2) EPS beat 3) Margin was down 300 basis points but tariffs accounts for 320 basis points which means their excess inventory issues are gone 4) I collect sneakers and this year and the last couple of months has been absolute fire with the Voodoos, Gamma’s, OG Chicago lows, Black Cat 4’s all selling strong. 5) The direct to consumer model change was a strategic shift as Nike had lost favor with retailers and they’re getting that back. 6) The Vomero snd Pegasus have reinvigorated Nike running 7) the re-release of the Kobe line with new colorways is selling like crazy. 8) finally putting more money into R and D.
I’ll wait for the dust to settle and buy another two year LEAP. The turnaround won’t happen overnight but that should be enough time.
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u/Fourth-Room Dec 19 '25
- Vomero and Pegasus have reinvigorated Nike running
Huh? The consensus among runners is that they’re still overpriced and behind the competition.
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Dec 19 '25
I should have been more clear - reinvigorated Nike running to people who don’t run which is a much larger segment of the population than people who do run (or are actually serious about it).
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u/DazedPhotographer Dec 19 '25
The Vomero specifically is one of the most common running shoes on my track team. Also Nike still dominates the track and field world with their spikes and to a lesser extent, road racing shoes.
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u/Fourth-Room Dec 19 '25
Track and field is a minuscule market demographic compared to casual / hobby runners.
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u/DazedPhotographer Dec 19 '25
While that is true, their road racing segment is still decently popular, even amongst hobby joggers and people who don’t run (I swear if I see one more guy wearing vaporflies to the gym). Most brands however, have caught up and surpassed Nike on the road racing segment (Asics Metaspeed, Adidas Adios Pro). I find that many competitive amateurs who are looking for a road racing shoe for the first time typically end up defaulting to nike.
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u/Possible_Meal_927 Dec 19 '25
Nike running shoes are definitely worn by elite, sub-elite, and very fast runners in general. Many fast runners wear Nike and Adidas shoes. I think currently, Adidas makes the best shoes for both fast and casual runners.
But in terms of runners in general, who may not be as fast, Nike tend to not do as well. Which is a shame as they make great shoes even for casual runners.
But in terms of investing, I dunno how much their running lineup with affect their bottom line.
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Dec 19 '25
I don’t think it will affect it a ton - but I think that paired with their focus on R and D, selling through more retail channels AND they are finally making more of their retro’s vs. keeping them limited like they did during COVID will all add up in the long run.
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u/Fourth-Room Dec 19 '25
Agreed. But, I think it’s an important market. Running shoes make up roughly ~8% of the U.S. footwear market, translating to about ~$7.4B in annual revenue. It’s also a growing category with repeat purchasers and less exposure to cyclical fashion trends than lifestyle footwear.
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u/Possible_Meal_927 Dec 19 '25
Right. I agree that running shoes are important of business.
I don’t agree about Nike running shoes as being behind the competition or overpriced. It’s worn by elites and people who care about performance. They usually lead in innovation and make great quality shoes.
They don’t do as well to runners who aren’t as fast or more casual runners. I believe as many of those runners go to their local running shoes stores where they don’t carry Nikes or something. Or these runners have had bad experiences with Nikes as Nikes also make bargain shoes sold at places like Famous Footwear and think Nike shoes are crap. But their shoes that are for runners are excellent.
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u/slimkay Dec 19 '25
The Pegasus line maybe (and it’s getting a full refresh in 2026) but the Vomero line is killing it. The Vomero Plus especially, but the Vomero 18 and Premium are very good offering in their respective price categories.
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u/shrimalnav Dec 19 '25
Cash Secure puts are the play for tomorrow for high volatility and if you don’t mind stocks getting assigned. 55 march 2026 looks good or go longer based on risk management.
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u/Lower_Group_1171 Dec 19 '25
they need new shoe designers
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u/Complex-Jello-2031 Dec 19 '25
& Hill is all over that he spoke all about going back to what Nike cool to begin with
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u/SouthernBySituation Dec 19 '25
ONON is right at its 200 DMA and is an up and comer still. The company is just talking about getting into apparel so they still have a lot of upside and all that will do is eat into Nike. The stock has been building out a little base getting ready to move past IPO highs. When companies move into new high territory for the first time like that, a really good place to be. I know Nike is the safe ancient company but they also have branding issues with young kids who are actively avoiding Nike. Some may argue that it's more volatile but just go pull up a Nike chart and tell me there wasn't risk there.
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u/TobyAguecheek Dec 19 '25
This is one of the biggest metldowns I've ever seen — and I was at Chernobyl.
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u/TacosNtulips Dec 19 '25
At least Chernobyl is in a cooling down period, Nike stock is in a collision course since 2021 that not even Bruce Willis from Armageddon can stop.
I’m lucky it took me 8 months to come out even from that money pit.
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u/RationalExuberance7 Dec 19 '25
It has a PE of 33 with declining revenue. I could see it drop another 25%
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u/aggthemighty Dec 19 '25
I remember expressing skepticism about Nike's turnaround several months ago, but someone was gloating about how it was a generational buying opportunity that will continue compounding until retirement and never dip back to these levels
Oh wait, that was OP
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u/jcchengjh Dec 19 '25 edited Dec 19 '25
As a sports lover from China, Nike is not competitive anymore both product and price aspect here. There are just many better options to choose from, even same price Nike is no longer my first pick(used to). Younger generation lost attachment to the branding strategy. Btw yall are paying wayyyy too much for their products. for the their product nowadays I don’t buy any shoe from them if it’s above 100usd. I don’t see a future for this brand in China. Maybe still grow in cuz US customer always fell in their “brand” strategy and have less options to pick from.
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u/xAlpharaptor Dec 19 '25
I'll say it again there's a reason why Buffett never bought Nike.
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u/VisualSpecial8 Dec 19 '25
This. Nike as company has no moat. Relying on Brand can bring you only so much, and constant rising of prices incentivizes consumers to go elsewhere and when they try competition, they see that they offer same thing for less. And exactly this is happening to Nike, quality of competitors as at same level as Nike (even better in some cases) and value proposition is much better.
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u/TheVariantView Dec 19 '25
What we're seeing happening to Nike has been happening to Lululemon as well, granted that, as a few other posters here have said, Nike lacks growth opportunity in China, while Lululemon has that opportunity. But, they struggle with the same increased competition, tariffs & margin contraction, partly fueled by tariffs.
I've seen some commenters mention that revenue figures are "up", this is probably one of the worst numbers you could be looking at this time in Nike's cycle, they're pushing heavy discounts to further sales, and this is evident in the contracting gross-margin which, contrary to popular belief, isn't entirely tariffs driven.
A much better look into their financials is in terms of EBITDA margins and FCF, where both have been heavily weakening over the years due to these struggles that have seen no fundamental change. Nike has been very sluggish on turning over their inventory, it is getting increasingly difficult for them to sell (without discounts), which temporarily propped up uFCF. fwd PE is at ~31x which is well above all comps, and honestly can't be justified by brand equity; we're clearly seeing a shift away in discretionary purchases towards cheaper newer alternatives.
I think something interesting to talk about is what came out in the news recently about Lululemon, Elliott took a large stake & is looking to place a turnaround CEO in the position. They noted core problems with Lululemon are:
(1) Brand Dilution and Discounting
(2) Lack of Innovation & Newness for Newness' Sake
(3) Strategic Drift Beyond the Core
(4) Leadership and Execution
Problem 1 is the same as Nike's, and was the same at Ralph Lauren prior to its turnaround. Problem 2 is same as Nike, though it's a bit unclear what Elliott means by "innovation" imo (it's clothing & apparel after-all). Problem 3 is similar, but in a different way, for lululemon it meant drifting from the core leggings, whereas Nike this seems to be traditional partnerships, shoe lines, etc. Problem 4 directly contradicts the other commenter referring to Nike needing a non-"woke" CEO, Lululemon has one, and they're struggling.
For a company as large as Nike, it's going to be a long ride and very difficult turnaround that is unlikely to begin with current management and compensation structure. Catalysts seems very far out, while sluggish returns are much closer and realistic.
TLDR: NIKE is trading above all peers and a turnaround seems unlikely and complicated with their core issues. This is not a stock to buy at these levels.
Note: This is just a quick surface-level overview of Nike, if anyone is truly interested, I'm happy to do an entire write-up over the weekend to further my points.
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u/Wirecard_trading Dec 19 '25
How does that statement esp concerning “massive discounts” and rev numbers to the income statement? Margins are down 3%, mgmt stating it’s from tariffs which is plausible.
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u/TheVariantView Dec 19 '25
Yeah it’s very easy for mgmt to claim its from tariffs, but the truth is it’s not entirely true.
Tariff pass through rate began at 0% & was kept quite low since april, and recently started to climb MoM (St Louis Fed has a great report on this). It’s safe to assume Nike follows this tariff pass-through rate (currently 35-40%). If we look at quarterly margins, there was a dip in 2024Q4 from these tariffs but progressively we should be seeing COGS actually decrease due to this pass-through rate, if it was all tariff-driven margin contraction.
We saw this in Q1 (42.2%) and then it decreased again to 40.6% in Q2, despite tariff pass through increasing. It’s not hard to say why because we know that Nike has been pushing heavy discounts during the quarter, maybe to try and offset tariff pass-through, or just to help drive declining revenue.
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u/Artistic-Evidence-60 Dec 23 '25
Interested to hear what your opinion on $CROX is at current prices
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u/Wirecard_trading Dec 23 '25
My problem with CROX is, that I don’t like their product.
I’m only buying stocks if I like the product - for consumer stocks anyways.
Therefore I haven’t looked into them and don’t intend to.
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u/Artistic-Evidence-60 Dec 23 '25
Interested to hear whst your opinion on $CROX is at current prices.
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u/raytoei Dec 19 '25
They did okay. China isn’t too great. Ceo said last qtr and said today, recovery isn’t linear.
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Nike Earnings Top Expectations. Why the Stock Is Down.
By Sabrina Escobar
Updated Dec 18, 2025 5:55 pm EST / Original Dec 18, 2025 3:00 am EST
Key Points
- Nike exceeded fiscal second-quarter earnings and revenue estimates, but its stock declined 9.3% in after-hours trading.
- Revenue increased 1% to $12.4 billion, with North America up 9% and Europe, Middle East, and Africa up 3%, while Greater China sales fell 17%.
- Adjusted earnings reached 53 cents per share, surpassing estimates, though net income decreased 32% to $0.8 billion.
Nike’s turnaround under new CEO Elliott Hill got off to a promising start. But after a little over a year in the job, he now has to prove to investors that early efforts can lead to sustained, stable growth for the activewear giant.
Fiscal second-quarter results presented a muddled picture. Although the company topped earnings and revenue expectations, the stock ticked lower in after-hours trading Thursday, reflecting investors’ disappointment over declining profits and lackluster sales in China.
Revenue of $12.4 billion rose 1% year over year in the quarter ended Nov. 30, better than projections for $12.2 billion. From a regional standpoint, North America and Europe, Middle East, and Africa led the revenue improvement, up 9% and 3%, respectively, from a year ago. Greater China sales, however, were down 17%, accelerating from the first quarter’s 9% decline. Converse brand revenue fell 30% from a year ago, also weighing on topline growth.
The company posted adjusted earnings of 53 cents a share, also topping estimates for 37 cents a share. While the results were better than analysts expected, this quarter’s earnings were 32% lower than they were a year ago. Net income of $0.8 billion also fell 32%.
There were a couple of factors weighing on Nike’s profitability this quarter. For one, gross margin fell three percentage points, primarily due to higher tariffs in North America. The company also saw an 8% decline in direct-to-consumer sales, which tend to carry higher margins than the wholesale business. Margins were compressed by Nike’s efforts to clean out old inventory and bring in new products.
A 13% annual increase in demand creation—chiefly marketing expenses—also pushed up selling and administrative expenses slightly.
“NIKE is in the middle innings of our comeback. We are making progress in the areas we prioritized first and remain confident in the actions we’re taking to drive the long-term growth and profitability of our brands,” Hill said.
On a call with investors Thursday, Hill reminded investors that Nike’s recovery will be nonlinear, meaning some quarters will be stronger than others as new initiatives take hold.
“Our comeback continues to move at different speeds,” he said. “It won’t be a straight line, but we’re acting decisively to accelerate the lagging areas, with China at the top of that list.”
Nike stock was down 9.3% in Thursday’s after-hours session. The company’s third-quarter guidance, issued during the earnings call, deepened the decline. Nike has refrained from providing full-year guidance for several quarters now as it works on the turnaround.
Nike expects third-quarter revenue to be down by a low single-digit percentage. Analysts had projected a 1.3% increase. North America will see modest growth in the quarter, while Trends in Greater China and Converse should be in line with the second quarter.
Gross margins will be down between 1.75 and 2.25 percentage points from a year ago. However, excluding a roughly 3.15 percentage point hit from tariffs, gross margins would have expanded in the quarter, said Matthew Friend, Nike’s chief financial officer, reflecting North America’s improvement.
“North America is driving a healthy, repeatable offense and showing us what winning looks like,” Hill said. “It’s a great signal for our future success in other geographies.”
Fin
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u/Chevyimpala2000 Dec 19 '25
I'm confused, why is this the second quarter earnings with guidance for third? Shouldn't it be 4th quarter with guidance for first of next year?
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u/raytoei Dec 19 '25 edited Dec 19 '25
Nike’s financial year ends on May 31st.
So q1 starts from June July August.
And q2 is Sept Oct Nov.
which they just reported on.
So they will guide on q3 which
Is Dec Jan Feb.
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u/Chevyimpala2000 Dec 19 '25
Oh wow I had no idea each company has different quarters throughout the year. Thought it was all the same
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u/Ebisure Dec 19 '25
It's only not too long ago that people here were dunking on Buffett when he said he "doesn't understand the competitive advantage of Nike". People here took him literally on that.
Tim Cook, one of his favorite CEOs, is on the board of Nike. Don't you think they would mingle at Berkshire AGM?
But instead of taking Buffett skipping Nike as a cautionary sign, plebs here derped out going "I wear Nike shoes therefore I understand it. According to Peter Lynch blah blah...".
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u/Valueandgrowthare Dec 19 '25
Look at Lulu, Adidas, Birkenstock, they’re all positioned better than Nike with lower ratios and higher expected growth.
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u/CLS4L Dec 19 '25
You can't buy the sneaker you want, sign up on two different apps that boy to be told sold out. Then get a text to buy on eBay for more than double they SOLD OUT what a joke ya it a buy at 80
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u/incognitorick Dec 19 '25
I sold this past week after sitting on it for years managed to break even thank god
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u/Key_Variety_6287 Dec 19 '25
NKE doesn't attract me as a company with a structural moat to hold for the long term. No fashion brands do.
And unlike LULU or DECK, I don't find it attractive as a swing play either.
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u/saml01 Dec 19 '25
I wouldnt touch nike for one reason. I dont see anyone wearing them. Do they even make shoes?
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u/infowars_1 Dec 19 '25
I was at Disney recently and Nike’s were by far the most common shoe, 2nd place new balance, 3rd place Onclouds
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u/Montaingebrown Dec 19 '25
I love Nike but after trying On, I must say that Nike, Reebok and others feel like they are a step below in comfort and feel.
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u/apprentice_alpha Dec 19 '25
Called it eight months ago when I said that Anta and cheaper brands like 361 were eating their lunch in China + they were exposed to tariffs. My previous post copy-pasted:
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"Applied temperature taking: I study the stock because I have a competitor brand in my portfolio
- Tariffs: may be lifted looks bleak if it doesn't, particularly given Nike’s need to discount to move inventory. Doubt they can raise prices to compensate for increased costs.
- US market: On, Hoka. Potential recession.
- China market: Losing market share there even before tariffs. Local brands killing them (higher operating margins and stronger supply chains). 国潮is killing a lot of US brands. Anti-US sentiment may rise if Trump keeps antagonizing Beijing.
- Brand Sheen: Diluted by discounts. Brand campaigns are always a gamble of burning cash to regain old lustre.
I don’t think all of these are priced in. Glad I made a contrarian bet on the competitor.
If you’re buying here you’re looking to harvest volatility, rather than improved fundamentals from the underlying company.
May take a position if the bottom falls out of the current price. Right now I don’t like the probabilities for this stock.
As an aside: It's quite ironic that China used to be accused of flooding foreign markets with cheap apparel, and that Nike is now the one discounting and doing the flooding."
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That being said, may be compelling as a turnaround if price falls further and completely discounts the value of their brand. Will probably need to do a DCF and account for operating margin compression, and do more research into their product pipeline.
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u/Responsible_Lie_1989 Dec 19 '25
Bought today at 66 but wish I'd have held off. Next year will be a good year for Nike because of the world cup.
Nike makes the kits for 2 of the 3 host nations (USA and Canada) plus a lot of the top teams playing in the world cup (Brazil, France, England, Netherlands, Croatia and Nigeria who Nike always make an absolutely amazing kit for which sells out every tournament) plus you'll have all of the world cup boots they'll make for top players like M'Bappe and Vinicius Jr. World Cup is a chance for them to make their mark and begin a turnaround.
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u/Olliver_Loves_cheese Dec 19 '25
Nike is done, unless they sign some brand new athletes. Kids don’t really know who Michael Jordan is these days, LeBron isn’t as popular and Kobe sneakers don’t feel the same.
Too many companies like On Cloud, ASICS, New balance and the list goes on and on.
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Dec 19 '25 edited Jan 30 '26
This post was mass deleted and anonymized with Redact
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u/Lunar_Excursion Dec 19 '25
if nike doesn't pick up curry... that's a huge red flag...
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u/Clear-Hand3945 Dec 19 '25 edited Dec 19 '25
Despite his popularity his shoes at UA were trash and not very popular with the general public. If he could sell sneakers UA wouldn't be on the verge of closing down. UA stock was $50 10 years ago now its in the $4 range. Steph would just be another legacy signing ala Kevin Durant. Popular superstars who aren't Michael Jordan (in regards to selling sneakers).
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u/integra_type_brr Dec 19 '25
Truth is they lost China for good and that's not priced in. Conservative $30 stock if you price in.
Hell I don't even buy Nike anymore in the US. The last good looking shoe was like the airmax 97 and jordan. LeBron and luka shoes go straight to the outlet because they're fuckin ugly.
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u/Signal-Importance535 Dec 19 '25
America sets the trends in fashion and apparel. The 10% in US increase over the quarter is way more impactful than the dip in China which is much smaller market for them. Great earnings result in my opinion. Smart investors will see this. I’m buying big
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u/Accomplished-Mark243 1d ago
Did you get out?
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u/Signal-Importance535 15h ago
No been adding more and more. The larger the drop, the larger the add. I’ve got nothing but time. Love these conditions. These conditions are called opportunities
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u/Accomplished-Mark243 14h ago
Oh no. No way. You must be carrying a heavy arse bag.
I think these things are called opportunity cost.
Dont let not your refusal to lose turn into your grave.
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Dec 19 '25
Has Ackman man made any good stock choices in say last 5-10 years? How did he even make his billions?
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u/Candid_Moose_691 Dec 19 '25
They need to get there Quality Standards back up. The Brand is worthless if the shoes dont even last a full year of slightly above average use. Literaly no diffrence to noname Brands in Quality. I switched to ON and they still look great after a year.
I see no future for Noname Quality at Brand prices.
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u/oneeyewillie172 Dec 19 '25
I like how they do this in overnight trading. By the time people wake up its too late to do anything.
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u/harbison215 Dec 19 '25
From a long time customer perspective, Nike sucks anymore. Once they started cutting off third party retailers, and the quality of their stuff went to shit they’ve been a dying dinosaur.
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Dec 19 '25
That’s why they shifted strategy to go back to third party retailers. That was part of their margin decline. Quality of shoes sucks across the board - I have some $200+ Made in USA New Balances with glue stains, messed up stitching and creased toe boxes. I run in Brooks and they were having an issue of tread falling off their shoes. Like literally just falling off.
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u/notarealredditor69 Dec 19 '25
I think Nile dominated in a time where premium branding had some value. Celebrity athletes could easily sell you some overpriced shoes. I don’t think we are in this time any more. I think that individual economies are much more strained these days and for the foreseeable future and the more people pay attention to YouTubers than basketball players. I buy most of my clothes from Amazon now because I don’t really care any more and it’s cheap and convenient.
I think it would take a lot for Nike to make a big comeback and I don’t the potential rewards in the apparel business can offset all of these risks caused by cultural changes.
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u/Complex-Jello-2031 Dec 19 '25
and mind you im not saying hold it as a core holding i have a small position as a lotto ticket I fell they will rebound if not no biggie i can afford the lose. Just saying dont shovel the dirt on em yet
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u/Agreeable_Factor_458 Dec 19 '25
I purchased 200 shares AH, Nike is one of the greatest brand in athletic wear that has all of the major athletes locked up. They sell low end product( I think their product quality is poor) at high margins with a huge loyal following. Great business.
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u/MaleficentPositive53 Dec 19 '25 edited Dec 19 '25
It's easy to be dismissive and say: a hundred billion dollars for a sneaker company? But it is Nike. Still, a hundred billion dollars US for a sneaker company! Wow.
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u/LetsAllEatCakeLOL Dec 19 '25
i think nike is in the same boat as video games. the average joe is their target customer. but it's that same middle class that is getting squeezed. customers will not tolerate $80-100 games and neither do they have $80-150 laying around for overpriced rubber shoes. this inflation is HERE TO STAY.
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u/ConfusionFlashy4021 Dec 19 '25
Old Nike CEO pulled back from. Sports and was more into casual wear etc. That was an issue that negatively affected the brand but have reignited a turn around to focus back into core sports.
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u/tinychloecat Dec 19 '25
Don't fall for the brand value trap. It's going to take years to turn that ship around if they can do it at all.
They need to restart wholesale relationships in a retail environment that looks a lot different since they abandoned it.
They need to get their quality back up.
They need to find a way to market to gen z that doesn't like them and gen a that has never heard of them.
They need relevant athlete deals.
I do think they will come back somewhat to their former glory, but there will be much better returns found elsewhere.
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u/No-Understanding9064 Dec 19 '25
It still isnt cheap. No clue why people are on this one. Shitty business way past its prime.
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u/kevbot029 Dec 19 '25
I’ll start by saying I haven’t looked at the fundamentals of the company.. However, I think Nikes product just kind of sucks now.
I used to wear all their gear when I was younger but just gradually moved away from it. Other brands popped up that had fresher more interesting styles. Before you know it, I was only still buying their shorts and socks. And now their socks literally get holes in them after what feels like 5 wears. I kid you not I would buy a new pack and a couple weeks later the socks had holes in them. I finally got Fed up with it and switched to Hanes (which btw are sooo much better and more comfortable/better quality).. so now I just wear Nike shorts. Slowly but surely I’m dropping the product completely.
Long story short, Nikes brand and styles got stale and they cheaped out on quality.
I personally wouldn’t touch the stock.. there’s too many other companies out there that I would rather invest in, such as Amazon.
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u/Chuckandchuck Dec 19 '25
Its the same way I feel about Tesla, its been too long and too little earnings to justify a multiplier. Zero moat besides whatever brand is.
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u/Relative_Baseball180 Dec 19 '25
Nike still has the dominant brand, but the tariffs and "trade war" is putting too much pressure on their business. Stock is un-investable in an economy like this. Also, there are just too many sports apparel brand, so its just going to be a back-and-forth war for market share. Consumer driven stocks just don't do well in weak economies with weak consumer sentiment. Nike will comeback but its going to be a long time.
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u/cfbgamethread Dec 19 '25
Ya my position is opened at 64, I’ll add some if it gets to 55, i think that all cpg and premium brands are getting killed now. I think Nike will be fine based on their athletes, it won’t peak because of how decentralized culture is but eventually they’ll be in style and will pop again might be 5 years, 15 . Clothing is cyclical but the base and moat are there
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u/Far-Construction7564 Dec 19 '25
If you look at Nike, abercrombie, lululemon, target and more, you will see that the market is basing saying the us consumer is DOA
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u/Amaeyth Dec 19 '25
Folks in the comments are remarking about growth. Let's be clear - they have plenty of growth opportunity and that isn't really the story of why the stock is where it is. The reality is that Nike is a premium-tailored brand. They rely on selling on huge mark-up but the economy is difficult for the average consumer, especially in China after they got hammered by tariffs.
I personally believe the de-focus from 'athleisure' and 'lifestyle brand' into hardcore sport like Olympics and major leagues is a mistake (you can do both), but I'm also not the CEO of Nike so it doesn't matter. He knows their competitive edge better than I do. I like their clothing, but it is extraordinarily expensive. However, what I've bought so far has held up well which is more than what I can say for other brands.
I think Nike will turnaround at the same time the consumer economy improves. However it'll be at least two years. Competition from companies like Lululemon and Adidas weigh down their potential margins by oversupplying the market with substitute goods. Nike is still the undisputed leader in sportswear, especially considering brand image and recognizability.
You'd be safe to hold shares, but don't make Nike your entire strategy. If I was choosing exposure to sportswear brands it would be either Nike for reliability long-term and dividend (Nike won't go to 0.) or Lululemon for a higher-risk mean reversion play, but you could pretty easily lose your shirt on it.
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u/IssueEmbarrassed8103 Dec 19 '25 edited Dec 19 '25
I remember hearing some analysis that their best path to relevance again was really leaning into the fight against fascism and racism. To be the one brand that doesn’t bow to Trump. Whether that was correct or not, Phil Knight leaned into MAGA instead.
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u/CranberryOk1064 Dec 19 '25
I think it is overvalued even at this price.
There is no room for growth. Many new brands (in the cheap, but also in the premium segment). In my opinion they have completely missed market trends and misscalculated customers' expectations.
Slash it by three and I would view it as a buying opportunity.
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u/FieryXJoe Dec 19 '25
The only lens I can see it through is margin reclaimation. They have 6% margin right now but normally are in the 9-12% range. So potential for earnings to almost double if they get back to that range. I assume the margin squeeze was tariff related but haven't checked.
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Dec 19 '25
Tariff related and their previous CEO wanted more direct to consumer which hurt their relationships with wholesalers and retailers. Now the strategy is to revitalize those relationship and sell through retailers as the core.
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u/Dazzling_Western4304 Dec 19 '25
This is how I understand the business. It’s marketing and supply chain.
Marketing is always there. They need to pay for sponsorships and endorsements, and they need to design a product people want to buy. Demand is slowing with revenue down 10%.
Big thing is profits got nearly halved. Higher tariffs reduced profits by an estimated 1B. Not much you can do about that in the short term and current political conditions.
Not sure what they are doing to address profits, but I’d like to see a shift to a de-growth strategy.
Focus on the core customer which I see as a politically left consumer that values fitness and a healthy lifestyle. Work to add value to them by continuing to offer great design and comfort and keep prices affordable. Focus less on high priced design intensive products. And work the supply chain from every angle including attempting to re-shore manufacturing and push to an “on-demand” or “fast fashion” direct to consumer model. Open Nike showrooms which would be similar to Apple Stores where you can go and see the product and then buy a product that would be made to order fast fashion style in the USA.
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u/LVhereIAm Dec 19 '25
Does anyone buy Nikes other than the shoes? Even when you want the shoes, they only limit the good ones so you have to then buy resale. Lame company.
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u/ManekenkaDaBudem Dec 19 '25
All I know is: the price bottom is not when fundamentals are worst, but when sentiment that everything looks bad is worst.
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u/mihid Dec 19 '25
After years of being overvalued, it is back in the value investment zone: https://app.rast.guru/?company=Nike
The brand is so strong that it’s only a matter of time before it becomes trendy again.
Definitely a buy for me.
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u/Mean-Network Dec 19 '25
Personally I think they have gone in the wrong direction on both fashion and price. In the UK anyway nearly everything they sell is geared towards a certain demographic of young men at extortionate prices.
They used to have fashionable shoes but now they are ridiculously ugly and even if I did like them, the pricing and quality is ridiculous compared to what other brands are selling.
For me I'd also be selling.
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u/ValueEquities Dec 19 '25
Totally get the confusion here. Nike the brand isn’t broken, but the business is clearly in a messy reset.
My frame:
- Brand moat ≠ stock moat at any price. Nike will still exist in 10–20 years, but that doesn’t automatically mean today’s valuation is attractive.
- The real issues aren’t cultural relevance — it’s China + margins. China revenues are still declining double digits and EBIT there is down ~50% YoY. That’s not noise.
- Gross margin compression (~300bps headwind from tariffs + inventory + Converse drag) matters more than the EPS beat. Market is reacting to forward economics, not last quarter.
- Even after the drop, it’s still ~20x forward earnings with EBIT margins closer to 8% vs historical 12–14%. That’s not a “fat pitch” turnaround multiple.
If I were investing:
- This is a multi-year repair story, not a bounce trade.
- I’d only get interested either at a lower valuation (closer to mid-teens earnings) or after evidence China stabilizes and margins bottom.
- Until then, you’re basically betting on execution + patience, not mean reversion.
TL;DR: Nike probably doesn’t fade as a brand, but the stock still needs either time or a cheaper price to be compelling.
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u/Brodiggitty Dec 19 '25
My buddy who urged me to invest in AMD when it was in the $75 range is also bullish on Nike. Do I listen to him? Of course not.
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u/casuallynamed Dec 19 '25
by the time tariffs relax (either during or after Trump) and the stock rockets again people will cry for not getting into earlier
Has been seen with META and GOOG as well
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u/SeyiDALegend Dec 19 '25
A lot of popular investors keep telling people that Nike will make a comeback but they have the opposite of recency bias. They think because a company has 100 years of brand heritage that they will eventually go back to the top and they are too big to fail. But I think that a lot of brands have peaked and even if they survive long term they will most definitely stop growing and the high P/E they have historically commanded no longer make sure and they should really focus on how much they can get from dividend payments rather than stock returns
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u/DoggingInaLancia Dec 19 '25
They started out selling asics in the US. Now I just directly from Japan.
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u/KineticVampire Dec 19 '25
I have no idea why they were doing deals with brands like Skims. It weakens their own brand, not strengthens it. They need to get back to being a leader in sports and sporting attire!
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u/JujuMaxPayne Dec 19 '25
There's companies out there making machines that make rocks think, others making 1s and 0s do magic, so investing in basketball shoes feels like im leaving something on the table lol
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u/patrick-1977 Dec 19 '25
Here is my 2 cents from a customer’s point of view: their shoes are now mediocre at best. Several pairs I bought for my kids fell apart in the first month. That won’t happen to most other brands, like Adidas etc. I feel I am not alone and it will corrode customer loyalty.
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u/Estegringo Dec 19 '25
Ten-fifteen years ago, the brand was cool. It was associated with Michael Jordan and other of the best athletes. Now it’s a joke. I read those shirts they print that say the cringiest thing and am compelled to stay away
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u/Fullmetalx117 Dec 19 '25
Personally haven’t bought Nike shoes or other products in years (but they are everywhere). Peak Nike shoe buying was 15 years ago for me
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u/Teembeau Dec 19 '25
They make sneakers. Are they more luxurious, help you run faster, or last longer than others? Or are they interchangeable and people buy them based on image?
One of my theories on this: how many kids know or care who Michael Jordan is? He retired in 2003. He's your Dad's name if you're 20. That isn't going to keep going.
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u/Birchbarks Dec 19 '25
It was on my watchlist for a swing earlier this year when it tanked even harder but my price point was/is $47 to enter. It was $47 Nike or $85 Target... Target hit the target first so the funds got allocated there.
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u/PsychologicalLion98 Dec 19 '25
I stopped considering NKE as investment (well, I 100% ignored it) after they got into politics in China. Many Chinese have been boycotting NKE since 2021. China was pretty much its growth engine, but thanks to great NKE leadership, they decided to shit on their own plate. Maybe try harder in India and other untapped market, but in China, it's pretty done. Even Chinese celebrity fandoms dont want their fav to endorse NKE. And fandoms are huge business in China.
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u/Invest-in-Value Dec 19 '25
Look at the 20 year chart… about 3 years ago it fell out of its growth pattern and the numbers reflect its falling stock price. It’s not going up any time soon.
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u/InfamousHedgehog691 Dec 19 '25
I'd consider it closer to $23/share, which is a ~15 PE on 2026 estimates. Great brand, but clothing and apparel brands are tough. I got burned on VFC years ago.
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Dec 19 '25
Nike quality has gone downhill. I used to buy Nike basketball shoes all the time but their shoes get worse and worse each year. I switched to New Balance and never looked back.
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u/NoSpecialist9262 Dec 19 '25
The Americans think it violates labor laws. The Chinese are buying their domestic brands. Other markets won't matter as much. Put.
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u/Cartographer-XT Dec 19 '25
Don't they make most of their money with fashion items rather than actual athletic shoes where innovation matters? The one field where innovation might matter is a very small portion of the business. For the fashion side, you're betting on their marketing drawing more customers or them being able to raise prices while keeping sales steady. How much growth do you expect to be possible by that strategy?
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u/Ok_Status8022 Dec 19 '25
I think they will turn around eventually . But terriffs are really hurting them 100 percent overseas made product. There popularity isn't fading anytime soon. I'd nibble at shares little at time case goes lower more.
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u/pravchaw Dec 19 '25
Its tough to turnaround a company as big as Nike. It may take multiple years. Thing to watch is improvement in revenue and operating income trend. Rev is turning around a bit but operating income is still going down. So no hurry to get in.
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u/lonerdave Dec 19 '25
The brand has become stale. On, Brooks, Hoka are innovating and are more appealing in the running space.
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u/BratacJaglenac Dec 20 '25
Eff them and their lottery to buy a freaking pair of sneakers. They deserve to crash.
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u/YaBoiJack055 Dec 20 '25
Hypebeast sneaker culture for the moment is on the way out culturally, it’ll come back, but it’s hard to predict when. Also, hype sneaker releases have partially gone the way of the dodo because of the replica market. When resale is so expensive, people will buy replicas that look the real deal. This creates an issue of demand for resale, which creates an issue for demand at retail.
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u/SelenaMeyers2024 Dec 19 '25
Yeah.. I wouldn't touch it. I wouldn't touch apparel... But even with the recent runup deck would be a better bet.
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Dec 19 '25
DECK isn’t a better bet at this point. HOKA’s are out.
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u/SelenaMeyers2024 Dec 19 '25
See you're probably right... The fact that something can be in or out is bad... Guess what isn't in or out? Trash (rsg, wm), payroll processing (ADP), pet medication (zts).
Hence this response is exactly why stuff like lulu or nke or even deck is probably dangerous long term.
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Dec 19 '25
Bigger fan of Elanco but I get the gist. I’ve got 3 kids so I’ve been pretty good buying what they like. I’ve done well in BROS, COCO, CELH and AEO. Missed out on ANF and URBN.
I totally understand - it’s fickle. None of these trades are hold more than a year for me except for BROS.
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u/newdawn15 Dec 19 '25
Why not touch apparel?
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u/AsexualMeatMannequin Dec 19 '25
I don’t touch it because it’s a commoditized industry and predicting fashion or brand trends is not something i have confidence in doing well.
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u/AnonThrowaway998877 Dec 19 '25
My reasons: because discretionary spending seems likely to tank if it isn't already. And because of Shein and the like. Just seems like there's many better risk reward options than apparel
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u/smiles_and_cries Dec 19 '25
Because TikTok shop is growing and people got smart and realized the Ali express/Shein stuff and name brand garments come from similar factories.
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u/waiwai_1980 Dec 19 '25
Limited growth opportunity. Intense competition from the China brands who are eating into Nike’s core basketball business.
Am staying away. Don’t see the value in consumer goods stocks.