NIKE, Inc. (NKE): A Bull Case Theory

Core Thesis - NIKE, Inc. is facing significant challenges in FY2025, including a 10% decline in annual revenue to $46.3 billion and a 44% drop in net income to $3.2 billion, marking its first revenue decline in years [2][3] Financial Performance - The footwear segment, NIKE's largest, experienced a 12% revenue drop due to excess inventory and product fatigue, while apparel and equipment segments showed more resilience, with apparel down 6% and equipment up 6% [2][3] - The company's trailing and forward P/E ratios are 32.97 and 41.67 respectively, with shares trading at $71.22 as of September 24th [1] Competitive Landscape - Competitors such as Adidas and Lululemon have gained market share, with niche brands like Hoka and On attracting consumer interest through innovation and community engagement [3] - Regional performance varied, with North America facing oversupply issues, Greater China declining 13% due to weaker demand, and EMEA revenue down 10% amid inflation and competition [4] Strategic Response - NIKE has initiated a "Win Now" turnaround strategy under new CEO Elliott Hill, focusing on leadership realignment, cost reductions, inventory normalization, and prioritizing core sports categories [5] - The company is recalibrating its channel mix to balance direct-to-consumer and wholesale approaches while addressing supply chain and tariff risks [5] Future Outlook - Early indicators suggest stabilization, including improved sell-through in North America and a cleaner inventory base, with a strong balance sheet and renewed strategic focus setting the stage for potential recovery in FY2025 [6] - The execution of the turnaround strategy will be crucial for NIKE to reclaim its leadership position in the competitive athletic apparel and footwear market [6]