Greetings, astute investors! Welcome to your Tuesday deep dive on March 18, 2025, into Nike, Inc. (NKE)—the athletic giant that’s sprinting through a transformative year. Trading at $71.63 as of Monday’s close (per real-time data), Nike’s stock has shed 34% year-to-date from $108.57, yet it’s a tale of resilience amid headwinds. At GLHR Investing, we’re peeling back the layers of Nike’s financials and profits—where it shines, where it stumbles, and what it means for your portfolio. Let’s explore the ins and outs of this powerhouse!
Nike’s fiscal 2025 Q2 (ended November 30, 2024) paints the picture—revenue hit $12.35 billion, down 8% year-over-year from $13.39 billion, topping Visible Alpha’s $12.12 billion estimate. Net income was $1.16 billion—above the $968 million forecast—though off last year’s $1.58 billion. Earnings per share landed at $0.78, beating $0.65 expectations, with gross margins up 70 basis points to 45.4%—supply chain cuts and pricing power flexed. Posts on X note: “Nike’s holding profit ground!” Full-year 2024 revenue was $51.36 billion—up 0.3%—with net income at $5.7 billion, a 12% rise.
New CEO Elliott Hill, in since October, is steering a pivot—Q2 Nike Direct sales fell 13% to $5 billion, digital down 15%, as wholesale rose 5% to $6.9 billion. Inventory dropped 5% to $8.3 billion—leaner operations signal discipline. X buzzes: “Hill’s fixing the DTC mess!” Cash stands at $9.7 billion, debt at $8.9 billion—net cash positive—fueling $1.1 billion in share buybacks. Posts on X cheer: “Balance sheet’s tight!”
Challenges loom—China’s sales lag at $1.67 billion, tariffs threaten costs, and competition from Hoka and On nibbles share. X posts: “Nike’s losing runners!” Yet, Hill’s sport-first push—new franchises over Air Force 1s—aims for a 2026 rebound; third-quarter guidance sees low double-digit declines. Investors, CELH ($27.08) and XOM ($119) shine elsewhere—Nike’s P/E at 22 offers value. Pair with INTC ($23.41) for tech-energy balance—markets wobble (S&P off 5.3%), but Nike’s grit endures. Explore “The Little Book of Behavioral Investing” by James Montier on Amazon—a sharp lens for market swings. GLHR Investing Team’s got your edge—step in wisely!
Why Nike’s a Good Stock
- Brand Power: Globally iconic—$51.36 billion revenue proves staying power.
- Profit Resilience: $1.16 billion Q2 net income beats forecasts—margins up.
- Cash Flow: $9.7 billion cash, lean inventory—buyback fuel.
Potential Downsides (Still Positive)
- Growth Slows: 8% revenue drop—China and digital lag; Hill’s fix is early.
- Competition: Hoka, On bite—innovation’s key, and Nike’s on it.
- Tariff Risk: Costs may rise—supply chain agility mitigates.
Invest with precision,
GLHR Investing Team
