Core Insights - Nike plans to reduce its dependence on production in China to lessen the impact of US tariffs, forecasting a smaller revenue drop in the first quarter than analysts expected, resulting in an 11% increase in its shares during extended trading [1][4][12] Company Strategy - The company aims to decrease the percentage of shoes imported from China from approximately 16% to a "high single-digit percentage range" by the end of May 2026 by shifting production to other countries [4][10] - Nike will optimize its sourcing mix and adjust production allocation across different countries to mitigate the cost impact of tariffs [5] - The company is also evaluating corporate cost reductions and has already announced price increases to partially offset the tariff effects [5][6] Financial Performance - Nike reported a smaller-than-expected revenue drop of 12% in the fourth quarter, totaling $11.10 billion, compared to analysts' expectations of a 14.9% decline to $10.72 billion [12] - The forecast for first-quarter revenue is expected to fall in the mid-single digits, slightly better than the anticipated 7.3% drop, attributed to a renewed focus on product innovation and marketing [7] Market Position - The running category has returned to growth, with significant investments in running shoes like Pegasus and Vomero, while production of other sneaker lines has been scaled back [7] - Under the new CEO Elliott Hill, Nike is increasing its marketing spending by 15% year-on-year, focusing on sports-related promotions [9]

Core Insights - Lululemon's stock is currently trading at approximately $331, perceived as undervalued based on strong fundamentals despite market volatility [1] - The company reported Q1 2025 results with a 7% revenue increase to $2.37 billion and EPS of $2.60, surpassing expectations, but faced a 1% increase in same-store sales and a revised full-year outlook, leading to a 22% decline in after-hours trading [1][8] Financial Performance - Lululemon exhibits a trailing P/E ratio of about 18x and a P/FCF ratio of 19x, both below S&P 500 averages, indicating a value stock profile despite high performance [2] - The company has a three-year revenue CAGR of 19%, significantly outpacing the S&P 500's 5.5%, with annual sales reaching approximately $11 billion [3] - Operating margin stands at 23.7%, nearly double the S&P 500's 13.2%, with operating cash flow and net income margins at 21.5% and 17.1%, respectively, showcasing elite performance [4] Financial Strength - Lululemon's balance sheet is robust, with a debt-to-equity ratio of 4.9%, well below the S&P 500 average of 19.9%, and a cash-to-assets ratio of 26.1%, exceeding the market's 13.8% [5] - This strong financial position allows the company to withstand downturns and invest in growth opportunities [5] Market Behavior - Lululemon has shown significant declines during market corrections, with a 46% drop in 2022, a 47% decline during the early COVID-19 shock, and a 92% fall during the 2008 crash, indicating vulnerability to market sentiment [6] - Despite strong fundamentals, the stock's performance can be heavily influenced by market conditions [6][7] Investment Considerations - The company is characterized by strong growth, solid profitability, and a fortified balance sheet, but investors should be aware of its susceptibility to market downturns [7] - The recent Q1 results highlight immediate challenges while maintaining long-term fundamental integrity, suggesting a cautious approach for potential investors [8]

Investors can set themselves up for life with a portfolio of well-chosen growth stocks. Investing in companies that are likely to be earning substantially higher revenue and profits in 10 years than they are today will help you multiply your savings.To give you some ideas, three Fool.com contributors recently selected three stocks that they believe are positioned to deliver excellent returns in the coming years. Here's why they like Shopify (SHOP 6.17%), Cava Group (CAVA 0.93%), and Nike (NKE 0.22%). Riding ...

Asia Pacific Equity Research 28 May 2025 Anta Sports (2020) Overweight Global China Summit 2025 takeaways: 2025 guidance maintained; channel checks; maintain OW ▲ Anta joined our China Summit on 22 May, and we also conducted channel checks in Shanghai Grand Gateway 66. Our key takeaways: 1) 2Q-to-date continued the solid 1Q trend (see our 1Q report) with healthy inventory (Anta/Fila at c5 months), though discounts are likely to deepen in May (vs. Apr) due to the 18 Jun events. 2) 2025 retail sell-through gu ...

Core Insights - Swiss brand On is emerging as a global challenger in the sportswear market, reporting a net sales increase of over 40% to 726.6 million Swiss francs (US$869 million) for the three-month period ended March 31 compared to the previous year [1] - The brand has successfully captured market share from established competitors like Nike and Adidas through innovative product designs and favorable market timing [1][2] - Nike and Adidas still hold a combined 58% of global market share, while On accounts for less than 3%, but On's earnings growth rate has outpaced both companies in recent quarters [3] Company Performance - On's initial success was driven by the unique aesthetic of its shoes, which stood out in the market [2] - The company benefited from a shift in retailer focus towards emerging, high-growth brands during the years following its 2021 IPO [3] Competitive Landscape - Nike is currently implementing a turnaround plan under new CEO Elliott Hill, which could present challenges for On [3] - The sportswear industry, including On, faces uncertainty regarding tariffs, particularly as 90% of On's sneakers are manufactured in Vietnam, which could be subject to a 46% import duty [4]

21 May 2025 | 1:39AM HKT Anta Sports Products (2020.HK): Positive read from Amer: 1Q beat and guidance raised; solid China momentum continued; Buy Amer Sports (AS, Buy, covered by our US Consumer analyst Brooke Roach) reported 1Q25 adjusted EBITDA (incl. IFRS depreciation) of $299mn, above GS/FactSet consensus at $228mn/$227mn. Revenue grew 23% Y/Y, well above GS/consensus at 16%, with the beat largely driven by strong sales momentum across Arcteryx and Salomon. Adjusted gross margin expanded ~330bps Y/Y to ...

7 May 2025 | 2:28AM HKT China Consumer Connections Pulse Check: Labor Day holiday consumption wrap-up: better-than-expected and accelerated retail sales growth The retail and consumer sector data we collected during the Labor Day holiday this year (May 1-5, same as in 2024) suggests solid holiday spending growth despite a high base, which looks better than expected especially amid the US tariff-fueled pessimism in April. This reaffirms our view that consumption has bottomed out, though we acknowledge volati ...

Core Insights - DRYWORLD Brands Inc. has announced a partnership with City Futsal, a leading futsal and soccer organization in North Texas, to incorporate the Ronaldinho brand into their offerings [1][3] - City Futsal serves over 13,000 athletes and 1,000 teams annually and is developing a $17 million multiplex in Keller, Texas [2] Company Overview - DRYWORLD is a premium performance sports brand that focuses on innovative and high-quality apparel and gear for athletes [7] - City Futsal aims to create a positive and inclusive community for players of all ages and skill levels, providing high-quality competition and facilities [6] Partnership Details - The collaboration will feature Ronaldinho-branded uniforms, training wear, and athletic lifestyle products available in City Futsal's facilities, enhancing the experience for players [3] - The partnership is seen as a celebration of the beauty and passion of the game, with a focus on community engagement and player development [4][5] Market Impact - The addition of Ronaldinho's globally recognized brand is expected to reinforce City Futsal's commitment to promoting futsal and soccer across Texas and beyond [4]

Core Viewpoint - Adidas has indicated that U.S. tariffs imposed by the Trump administration will lead to price increases for all its products sold in the U.S. market, which is affecting its ability to raise its full-year outlook despite strong first-quarter profits [1][3]. Group 1: Impact of Tariffs - The company is "somewhat exposed" to tariffs on products made in China, currently at an effective rate of 145%, but has minimized exports of these products to the U.S. [2] - The most significant impact is from the general increase in U.S. tariffs on other countries, which are currently at 10% while trade negotiations are ongoing [2]. - Adidas has stated that the uncertainty surrounding tariff negotiations makes it impossible to quantify the final impact on costs and consumer demand for its products [3]. Group 2: Production and Supply Chain - Adidas is unable to produce almost any of its products in the U.S., relying on factories in countries like Vietnam and Cambodia, which face U.S. tariffs exceeding 40% in the absence of a trade deal [3][4]. - The retail sector, including both low-cost e-retailers and luxury brands, is facing similar challenges regarding price hikes and potential impacts on consumer demand due to tariffs [4].

Company Overview - The S&P 500 index, which includes some of the largest and most profitable companies in the U.S., has faced pressure due to economic concerns [1] - Nike's stock is down nearly 70% from its peak, indicating fundamental issues within the business [3] Financial Performance - Nike's revenue has declined year-over-year for four consecutive fiscal quarters, with management expecting a mid-teens decline for the current fiscal quarter [3] - Despite sales pressures, Nike generated $5.3 billion in footwear sales in Q3, maintaining a significant lead over competitors [9] Strategic Challenges - Previous management under CEO John Donahoe made strategic errors, including a lack of product innovation and over-reliance on classic footwear franchises, leading to excessive discounts to clear inventory [4][5] - Nike's shift away from key retail partners during the pandemic has created distribution challenges, as consumers still prefer physical stores [5] Leadership and Future Outlook - Elliott Hill, a veteran of Nike, was appointed CEO in October 2022, with a focus on revitalizing the brand's connection to sports [6] - The company holds a strong brand presence and marketing strategy, which may help it recover and grow in the future [8] Market Position - Nike's partnerships with major sports leagues and endorsements from top athletes provide it with unmatched visibility in the market [9] - The current investment in Nike is characterized as high-risk/high-reward, with a price-to-earnings ratio near a 10-year low, suggesting potential for significant returns if the company can turn around its performance [10][11]