Loomis Sayles, an investment management company, released its “Global Growth Fund” investor letter for the fourth quarter of 2025.  A copy of the letter can be downloaded here. The Fund prioritizes investments in high-quality companies that possess a lasting competitive advantage and long-term growth drivers, capable of generating attractive cash flow and sustained value for investors. The Fund returned -3.05% in Q4 2025 compared to 3.29% for the MSCI ACWI Index Net. As a patient investor, the firm maintain ...

Nike-owned Converse to realign operations and trim corporate workforce, source says | ReutersSkip to main content[Exclusive news, data and analytics for financial market professionalsLearn more aboutRefinitiv]Converse signage, owned by Nike, is seen at their store at the Woodbury Common Premium Outlets in Central Valley, New York, U.S., February 15, 2022. REUTERS/Andrew Kelly/File Photo [Purchase Licensing Rights, opens new tab]Feb 12 (Reuters) - Nike-owned [(NKE.N), opens new tab] Converse is cutting corpo ...

Core Insights - Nike is relaunching its ACG brand at the Milano Cortina Winter Games, focusing on innovation in apparel and targeting the trail running consumer [2][3][4] - The company emphasizes the importance of major sporting events as opportunities to enhance brand visibility and drive sales [5][6] - Nike's running business saw a 28% growth in the most recent quarter, indicating a strong performance in this segment [6] Brand Strategy - The ACG brand is positioned to capitalize on the growing outdoor and trail running market, which is experiencing increased consumer interest [8][9] - Nike aims to extend the ACG brand beyond trail running, focusing on design, protection, and innovation [10] - The company is committed to maintaining authenticity in the outdoor space, ensuring that its team understands the culture and needs of outdoor athletes [15][16] Innovation and Product Development - Nike is nurturing its design and innovation teams to create new products that meet athlete needs, leveraging its extensive sports research capabilities [24][28] - Recent product launches, such as the Alpha Fly shoe, demonstrate Nike's commitment to innovation and performance [21][24] - The company is focused on creating aesthetically appealing products that also deliver functional benefits to consumers [29] Market Performance - North America has shown a return to growth, with running sales up more than 20% overall, indicating a positive trend for the company [33][34] - The wholesale business is also recovering, with significant growth reported in North America [33][36] - Nike is addressing concerns about its global sales strategy, particularly in China, by enhancing product curation and local market understanding [49][50] Consumer Engagement - Nike is focusing on elevating the consumer experience across all retail channels, ensuring thoughtful presentation and assortment of products [40][42] - The company is committed to maintaining a balance between performance and lifestyle segments, positioning itself as a sportswear brand rather than a fast fashion label [57][58] - Partnerships, such as with Skims, are being explored to enhance brand appeal and reach new consumer segments [60][62] Future Outlook - Nike's leadership emphasizes a long-term vision of continuous improvement and innovation, aiming to leave the company in a better position for future generations [73][74] - The company is focused on maintaining its core identity as a sports brand while exploring opportunities in lifestyle and fashion [63][64] - Ongoing investments in brands like Converse are intended to diversify consumer engagement and revenue streams [70][71]

Core Insights - The company maintains a strong focus on sports and growth, leveraging its portfolio of three major brands: Nike, Converse, and Jordan [1] - Analysts express concerns regarding flat sales growth and profitability, questioning when the company will achieve sustainable revenue growth [2] - The company is confident in its strategy to generate profits and achieve top-line growth through its sports-focused approach [3] North America Performance - North America has shown a return to growth, with the largest reporting segment experiencing double-digit growth, overall up more than 20% [4] - The wholesale business in North America also returned to growth, contributing significantly to future business prospects [4][5] - There are criticisms regarding the heavy focus on North America for sell-in, but the company asserts a global focus in its wholesale strategy [5] Leadership and Market Relationships - The leadership team in North America is recognized for their strong relationships with wholesale partners, driving growth effectively [6] - The company has shifted its approach to retail partnerships, aiming to improve relationships with major retailers like Amazon and Macy's [7] - There is an ongoing effort to innovate and refresh product offerings to drive revenue and profitability, which is essential for regaining market share [8]

Core Viewpoint - Nike's stock has seen a significant decline of 56% over the past five years, raising questions about its ability to reach $100 per share in the future [1][4]. Financial Performance - Nike's all-time high stock price was approximately $166 in November 2021, and it currently trades 64% below that record [4]. - Revenue is projected to rise by less than 1% in fiscal 2026, while earnings per share are expected to decrease by 28% [6]. - Product costs have increased by $1.5 billion annually due to ongoing tariff impacts [6]. Market Position and Strategy - Nike remains the clear leader in the sportswear industry, generating $12.4 billion in sales for Q2 2026 [7]. - The company is focusing on rebuilding relationships with wholesale accounts that were neglected during the pandemic [5]. - Marketing expenditures, known as demand creation expenses, amounted to $1.3 billion last fiscal quarter, representing 10% of sales [8]. Leadership and Future Outlook - The current leadership team is committed to driving growth and restoring profitability, although this turnaround is expected to take time [5][6]. - CEO Elliott Hill is focused on returning the top line to growth, with the expectation that profits will follow [6].

Core Insights - Nike announced a significant organizational restructuring plan on December 2, 2025, which included the elimination of the Chief Technology Officer (CTO) and Chief Commercial Officer (CCO) positions, and the reinstatement of the Chief Operating Officer (COO) role, filled by Venkatesh Alagirisamy [1] - The restructuring is part of the new CEO Elliott Hill's "Win Now" strategy aimed at addressing the company's recent decline [1] - Following the leadership changes, Nike's subsidiary brand Converse is undergoing a major restructuring and layoff plan, indicating deeper issues within the brand [2] Financial Performance - Nike's Q2 FY2026 revenue was $12.4 billion, a 1% increase year-over-year, but net profit fell by 32% to $792 million, with a gross margin of only 40.6% [2] - Converse's revenue peaked at $2.43 billion in FY2023 but has since declined significantly, with FY2024 revenue at $2.08 billion (down 14%) and FY2025 further dropping to $1.7 billion (down 16%) [2] - In FY2026, Converse's Q1 revenue plummeted by 28%, and Q2 saw a 31% decline, resulting in only $300 million in quarterly revenue [2] Profitability Concerns - Converse's EBIT fell from $209 million in 2022 to $15 million in 2023, and by Q2 FY2026, it reported a loss of $4 million, marking a complete collapse in profitability [3] - The drastic 44% cut in marketing budget has not improved financial conditions but has instead weakened brand competitiveness, creating a vicious cycle of reduced budget leading to lower exposure and declining sales [3] Brand Comparison - In contrast to Converse's struggles, the Jordan brand is experiencing steady growth, benefiting from a strong cultural influence and clear positioning [4] - Converse's operating profit margin is only 6.54%, with a net profit margin of 5.43%, both of which are declining [7] Systemic Issues - Converse's financial troubles stem from multiple factors, including unclear positioning, outdated image, and declining cultural relevance [7] - The brand's reliance on a single product line, particularly the Chuck Taylor All Star, has become a burden, as the market demands both classic and innovative offerings [12] Strategic Outlook - Nike's current strategy focuses on cost-cutting and core business concentration, making it unlikely to invest heavily in Converse's brand revitalization [8] - The probability of Nike selling Converse in the long term is higher than that of successfully revitalizing the brand, as the "Win Now" strategy prioritizes immediate performance improvements [13][14] - Historically, Nike has divested underperforming non-core brands, and Converse's current performance aligns with the criteria for such divestiture [14]

Group 1 - The core viewpoint is that Nike's Air Force One series is experiencing a resurgence in growth, indicating a positive trend for the brand [1] - The CEO emphasized the importance of enhancing the brand's high-end attributes, suggesting a strategic focus on premium positioning in the market [1]

Core Insights - Nike's Greater China region has seen significant leadership changes, with current head Dong Wei set to step down on March 31, 2026, and Cathy Sparks appointed as the new Vice President and General Manager [1] - The company's performance in Greater China has been disappointing, with a 13% revenue decline in fiscal year 2025, marking it as the largest market decline globally [1] - Nike's overall revenue for fiscal year 2025 dropped to $46.3 billion, attributed to challenges in its Direct-to-Consumer (DTC) strategy and increased competition from emerging brands [1] Leadership Changes - Dong Wei has been with Nike since 2005, playing a crucial role in the company's development in China, including during significant events like the Beijing Olympics [1] - Elliott Hill, a veteran at Nike, has taken over as CEO and initiated the "Win Now" transformation plan, focusing on core sports and optimizing inventory [3] Strategic Initiatives - The "Win Now" plan includes a renewed focus on sports, inventory optimization, and reducing discounts to improve margins [3] - The company has re-established relationships with traditional retailers like Footlocker and JD Sport, enhancing their profitability [3] - In March 2025, Hill introduced the "Sport Offense" strategy, emphasizing a return to core sports categories such as running, basketball, and soccer [3] Financial Performance - In Q1 of fiscal year 2026, Nike's wholesale channel showed a 7% year-over-year growth, contributing to overall revenue growth, while inventory decreased by 1.68% to $8.114 billion [4] - Net profit for Q2 of fiscal year 2026 rose from $211 million in Q4 of fiscal year 2025 to $792 million, indicating improved sales efficiency [4] Regional Performance - North America saw a significant performance increase in Q2 of fiscal year 2026, with revenues reaching $5.633 billion, a 12.2% quarter-over-quarter increase and an 8.77% year-over-year increase [6] - The main brand's revenue in North America grew by 1% to $12.1 billion, although this was offset by declines in Greater China and APLA regions [7] Market Focus - Nike remains committed to the Greater China market, with Hill emphasizing its long-term potential and ongoing optimization of local operations [9] - The company has integrated its innovation and design teams for Nike, Jordan, and Converse to enhance collaboration and focus on three core metrics: innovation capability, market ecosystem restructuring, and structural adjustments in China [9] Product Strategy - Nike has relaunched its ACG (All Conditions Gear) brand, focusing on outdoor performance and targeting the competitive outdoor market in China [10] - The new ACG flagship store in Beijing is seen as a strategic move to capture the growing outdoor consumer market [10] Market Dynamics - The outdoor market in China is highly competitive, with brands like Anta and Li Ning also expanding their presence [12] - Nike's ACG brand aims to differentiate itself through specialized offerings in trail running and performance outdoor gear [12] Advertising and Brand Image - Nike has recently released advertisements aimed at reconnecting with its brand identity, indicating a desire to regain its previous marketing prowess [12] - The company acknowledges that the recovery process will not be linear, but the logic of collaborative growth is beginning to materialize [13]

Group 1 - BYD has filed a lawsuit against the U.S. government to reclaim tariffs imposed on imported materials, claiming significant costs for its operations in the U.S. [2] - Over 1,000 companies, including major players like Costco and Toyota, have initiated similar lawsuits against the U.S. government regarding tariffs [2]. - NIO's CEO Li Bin emphasized the importance of optimizing the CBU mechanism to maximize efficiency and minimize costs in the company's operations [6]. Group 2 - Ford's global sales fell by approximately 2% to around 4.4 million units, while BYD's sales reached 4.6 million units, marking a significant shift in the automotive market [6]. - BYD aims to increase its export volume to 1.3 million units in 2025, following a successful year of expansion in Europe, South America, and Asia [6]. - NIO plans to implement a "store partner" program to enhance operational efficiency and market responsiveness, allowing store managers greater decision-making power [6]. Group 3 - The European Union has approved Google's acquisition of cybersecurity startup Wiz for $32 billion, marking Google's largest acquisition to date [9]. - Apollo Global Management is nearing a $3.4 billion loan agreement to finance the purchase of NVIDIA chips for Elon Musk's xAI [10]. - Alibaba's DAMO Academy has released an open-source foundational model for embodied intelligence, RynnBrain, enhancing its AI capabilities [10]. Group 4 - The Shanghai government has opened over 5,200 kilometers of autonomous driving test roads, with plans to expand the testing area further [17]. - Toyota and Nissan reported sales increases in China for January, while Honda's sales continued to decline due to delays in new electric vehicle launches [17]. - The launch of the Robotaxi ride-hailing service by Alipay indicates a growing trend towards automated transportation solutions in urban areas [15].

Core Insights - NIKE Inc.'s direct-to-consumer (DTC) strategy aimed to enhance margins, consumer data, and brand control, but recent demand softening and rising inventories have highlighted the limitations of this model [2][9] - The company is now navigating a strategic tension between maintaining DTC benefits and leveraging wholesale partners for scale and efficiency [2][4] Operational Challenges - NIKE's digital channel became overly promotional, negatively impacting margins and brand perception, while reducing wholesale presence allowed competitors to gain market share [3][9] - Management is repositioning NIKE Digital as a premium channel and reinvesting in wholesale to restore balance, although this transition may lead to short-term revenue and margin volatility [3][9] Future Outlook - NIKE's success hinges on its ability to implement an integrated omnichannel model, balancing DTC for engagement and innovation with wholesale for volume and accessibility [4] - Clearly defining the role of each channel will be crucial for NIKE to achieve the right balance in its global operations [4] Competitive Landscape - Key competitors include adidas AG and lululemon athletica inc., both of which are also recalibrating their DTC strategies to maintain scale and market reach [5][6] - adidas is adopting a pragmatic approach to DTC, while lululemon's DTC-first model faces challenges in scaling globally without diluting its premium positioning [6][7] Financial Performance - NIKE shares have declined by 1.1% over the past three months, slightly better than the industry's decline of 1.2% [8] - The forward 12-month price-to-earnings ratio for NIKE is 28.91X, compared to the industry's average of 26.45X [10] - The Zacks Consensus Estimate indicates a year-over-year earnings decline of 27.3% for fiscal 2026, followed by a growth of 54.1% for fiscal 2027 [11]