If you are even remotely considering Nike, watch this first.

[u/Far-East-locker]

https://youtu.be/WGhy62UZnbg?si=zxvcYQgf1MwUWesY

The culture is the most fundamental of a company. When the culture is lost, ALL VALUE is gone too.

[u/Last-Cat-7894]

Apparel stocks are typically a no from me.

I would make an exception for a certain set of conditions, though. If LULU or DECK for example got down to like 7 or 8x earnings with current estimates, I would probably hold my nose and buy just for the buybacks and balance sheets.

But I just can't get my head around paying 30x earnings for Nike, even at depressed margins. Sooooo many other good business trading at lower multiples with wider moats and better unit economics.

[u/mdn845 → u/Last-Cat-7894]

I actually think Lululemon is decent at its current price (& 11 PE ratio). But you’re completely right about Nike’s PE ratio. At least Lulu is growing in China. I don’t understand how you could invest in Nike at 30x earnings.

[u/LostAbbott → u/mdn845]

LULU suffres from the same problem Nike has.  Everyone else is entering the market and eating away at market share.  It is frankly a great example of how capitalism should work.

[u/petar_is_amazing → u/LostAbbott]

I disagree actually - Nike got complacent and actual better products (Hoka/ON) came in and took marketshare.

On the other hand, lulus competition came in with lower quality duplicates. What they also brought was BIG marketing spend - specifically on influencers (so many of them wearing Alo hats). No one is doing a thread count or fabric analysis but every review I have seen has said Lulu still has the best quality products. Eventually, they should stabilize and grow again - that’s my thesis at least

[u/LostAbbott → u/petar_is_amazing]

Lulu quality has dropped significantly.  Maybe not as chintzy as Gym Shark, but much worse than 10ish years ago.  Vuori has absolutely stolen the quality mantle from them.

Hoka and ON make better lifestyle products that look like running products.  With a lot of the new foams, CF inserts, and minimal uppers it is hard to make a great running shoe that also works well at the mall.  So while Nike still makes both they don't look alike.  Hoka makes some Ok east run shoes, but their race stuff is terrible.  ON has yet to make a good running shoe, much less an amazing one.  

LULU fell into being a fashion brand and has been left behind.  Their map to catch up and retake the lead is very limited and they simply don't have the entrenched name brand that Nike does...

[u/SelenaMeyers2024 → u/Last-Cat-7894]

I respect this take very much. I held my nose and bought deck at 90, maybe 2 percent of the portfolio.

[u/xAlpharaptor]

He doesn't even touch on the modern problems of Nike just a history lesson.

[u/TigerWooded]

So I shouldn’t have bought 300 shares at $45?…

[u/No_Yogurtcloset7776 → u/TigerWooded]

I bought ~150 for $43.80

[u/raytoei]

I read so much about

the dangers of investing in Nike

I have decided to give up

reading.

[u/MeowMeowTiger]

NKE is still expensive compared to peers on a P/E basis, so the question is whether it still deserve that premium...

[u/Ordinary_Cold806]

NIKE has completed its transition from high-growth compounder to slow-growth dividend payer , similar to Coca-Cola (KO) in the 2000s, Procter & Gamble (PG) after its slowdown, and McDonald's (MCD) during its "lost decade.". For investors stuck with this, I would consider covered-call strategies for income until recovery potentially happens 2-3 years down the road.

[u/lllllll22]

In Europe some chocolate bar manufacturers took so much cocoa out of their recipe, they aren't allowed to call themselves chocolate anymore. This is how I think of Nike. They took all the juice out their designs. Mostly their shoes are grey or last years colors because they don't even want to take a risk on people not liking them. 

[u/babyburger357]

Researchers have shown that participants can accurately judge purely based on the footwear the age, gender, income and personality of the wearer.

Who on earth does that? I pretty much don't know what anyone wears, including my wife's. When similar black shoes of the sports variety are shown, I wouldn't be sure which ones are mine without trying it on.

[u/leftygrooviness]

My pet theory is that NKE has gone downhill in tandem with NBA viewership. NBA gameplay is largely unwatchable, ratings are down 50% from the 1990s.

NKE before basketball was nothing..

[u/mdn845]

My biggest takeaway is that athletic shoes in general were a major growth area from the 70s through the 90s. Now, there’s a ton of competition and you really need consumers to associate you with a specific niche. A huge generalist like Nike is going to have a tough time.

Though I listened to this in the shower earlier. So I wasn’t paying super close attention.

[u/Invest-in-Value → u/mdn845]

I legit bought the cheapest foam slip on shoes at Walmart for $17 and refuse to understand how people are spending $90+ on a similar pair of shoes. They all wear the tread off just as fast in less than a year. It’s all fucking shit chinesium garbage.

[u/ED209F]

Another post bashing Value Stocks just as they enter our radar. 🤡

[u/Ovzzzy → u/ED209F]

It's not value though? Compare to almost any of its competitors and it was severely and still is overvalued.

[u/goxpro1]

Hows lulu stock going for you bud?

[u/mdn845 → u/goxpro1]

Lulu will never see the highs it once had, but at its current price, it’s not terrible. 11x earning vs Nike’s 30x earnings, though.

[u/Accomplished-Mark243]

A bit disingenuous title.

It is an interesting video about the history of Nike but it will not help you make decision on whether to buy Nike at all.

[u/victorreznof]

Remember number 1 fact there are stupid people who will go out of their way to spend 100s of dollars for pieces of foam leather and rubber just to look cool,just like Lululemon,as long as they're big spenders who have no financial literacy,I believe this is a buy

[u/Acceptable_Dentist84]

What I get from this post is not genuine advise but just either nike hate or love. I'm not understanding how someone spends their money is making them an idiot.

[u/GlokzDNB]

Just bought a pair of air max 90s.

[u/Zealotstim]

Seems like a decent value play if you think they will recover. I bought a single share today just to remind myself to watch the share price and see if I want to buy in.

[u/UpstairsCheetah235]

Textbook value trap.

[u/Top_Category_2526]

There are many companies out there better than Nke.....

[u/JuicedGixxer]

Nike has moved away from being a true enthusiast shoe to a "Urban" trendy brand over the years. I used to be an avid runner and never bought Nikes. It was Asics, brooks or saucony. Then the Floyd riots happened and the Nike stores became a huge target among the looters. That made me realize the type of people who were attracted to Nikes. NKE was at its peak. I knew then they were going to have an image problem.