NKE
🔻 Nike’s revenue continues to fall, similar to the previous quarter, with direct revenues down 12% and wholesale down 7%.
⚠️ Gross margins are decreasing, indicating pressure on profitability despite efforts to sell at lower prices.
📉 Inventories only fell by 2%, while revenue fell 9%, suggesting potential inventory management challenges.
@bernardodegarcia:
“Third quarter… What a drag! Revenues keep falling, exactly like last quarter. Direct revenues, 12% below; wholesale, 7% below; margins fall; earnings per share, 0.54. How is this a good quarterly result? The progress we have made… We are on the right path… We have made an impact… The operating environment is dynamic. They’re coming at us from all sides; we don’t know where to catch them. But what matters most is that Nike is serving athletes with new, innovative products and reigniting the brand’s momentum. I don’t think so, man. SGNA, at least this also falls by 8%. Tax rate, 5.9 compared to 16.5. Net income, 0.8, 32% down. Inventories only fell by 2%. Cash equivalents were 10… I would like to have a graph—we can do this—I would like to have a graph of Nike’s revenues, Nike’s inventories, and the percentage that inventories represent over revenues, because revenues fall by nine and inventories only fall by two. It’s like you’re not… Concept: revenues fall by 99%, terrible; margins fall by 330 basis points, meaning a big hit. You’re trying to sell very cheaply so that they buy from you, but you’re not able to lower your inventory by more than 2%. Of course, I also don’t know if $7.5 billion is a level where Nike is comfortable with its inventories. It’s terrible, it’s going up, I mean, say yes, you’re trading at 35 times future earnings. It’s true that you’re trading at two times sales, okay, where Lululemon, perhaps, is trading much more expensively. But well, Lululemon is trading at double, but Lululemon brings me a growth that you don’t bring me, and Lululemon is trading at 22 times future earnings. You’re trading at how much? Nike was at 35 times future earnings.”
In @bernardodegarcia’s video, viewers can see the exact part of the YouTube video where Nike is discussed:
View the video on YouTube.
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