Nike vs. Starbucks: Which Turnaround Effort Is More Likely to Succeed?

Core Insights - Nike and Starbucks are both iconic brands that have faced challenges due to rising inflation and have recently changed their CEOs to implement turnaround strategies [1][7] - Both companies finished the previous year with negative stock performance, with Nike down 16% and Starbucks down 8% [2] Company Performance - Starbucks appointed Brian Niccol as CEO in September 2024, focusing on simplifying the menu, reducing wait times, and enhancing customer experience, which has positively impacted investor confidence [3] - Nike appointed Elliott Hill as CEO in October 2024, choosing an internal candidate with extensive company knowledge, focusing on improving wholesale relationships and brand investment [4] - Both companies have shown initial signs of progress in growth rates over recent quarters under their new leadership [5] Margin Pressure - Gross profit margin is a critical metric for assessing the impact of rising costs and pricing strategies on both companies [6] - Nike has experienced a smaller decline in its margin, losing about four percentage points from its recent high, compared to Starbucks, which has lost nearly eight percentage points [8]