For the first time in years, we'd call Nike a "battleground stock' headed into the print.
Given sharply decelerating futures trends, simply massive acceleration in the Adidas brand, continued growth out of UnderArmour, shrinking US distribution, NKE already tapped out inside FL (72% of FL sales bear a Swoosh), the Olympic Hangover, a peaky valuation, and guidance that implies a steep hockey stick in the back half -- it is easy as ever for a short-seller to build up a juicy case as to why this name is headed lower.
Our sense is that given the pesimism around the name, if you think a) Nike can hit the quarter, b) deliver on the hockey stick, c) think gross margins are headed above 50%, and d) see $5.00+ in EPS power, this is probably a stock you want to own.
We're going to review all these concerns, hit on a few others we have our eye on, look at where the increasingly bearish consensus is right, and where it is likely to get burned.
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Confirmation Number: 13645633
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