Will Nike Investors' Frustrations End Anytime Soon?

Core Insights - Nike's stock has significantly declined, down over 30% in the past year and off its peak of over $170 per share from November 2021 [1] - The company is facing challenges in sales and inventory management, with recent earnings reflecting a continued decline [2][7] Sales Performance - Nike's revenue fell 9$11.3 billion in the most recent quarter, with Nike brand revenue also down 9% to $10.9 billion [7] - Direct revenue dropped 12$4.7 billion, with digital sales contributing to this decline [7] - The Chinese market saw a 17% revenue drop to $1.7 billion, while North America experienced a 4$3.1 billion [8] Management Changes and Strategies - New CEO Elliott Hill is implementing a "Win Now" action plan to address previous management issues and focus on innovation [5] - The company aims to balance direct and wholesale selling, with an initial focus on the U.S., China, and U.K. for growth [6] Financial Metrics - Gross margin declined by 330 basis points to 41.5% due to increased discounts to clear inventory, leading to a 30% drop in earnings per share (EPS) to $0.54 [9] - Analysts predict further gross margin pressure in fiscal Q4, with expected declines of 400 to 500 basis points [10] Future Outlook - Management anticipates mid-teens revenue decline in fiscal Q4 due to various headwinds, including geopolitical uncertainty and tariffs [11] - A turnaround is expected to take at least a year, but early signs of progress could lead to stock recovery [12][13]