Yah, terrible 4Q read. But same reset we’ve seen 5 times in 40 years – but w sharper teeth. NEVER be short this event, or prepare for 3 years of severe pain.
Announcements like this are never Bullish on the print (in two weeks). But here’s what people will miss today…
1) this has likely been in the works since before the last print. Probably not a signal of the business falling to pieces, but rather…
2) Culmination/articulation of what the company has been working on since 2006 being accelerated.
3) Answer to the meaningful erosion in e-comm in 3Q (Feb).
4) NKE’s answer to getting ripped by Adidas last year.
5) Move to experiential in-stpre experience – as opposed to a ‘meh’ we want more e-comm’ strategy.
6) Nike NEVER cuts workforce – ever – unless it’s mid-way through a multi-year reset – and it’s cutting 2%. #bearish.
7) BUT this is the same kind of reset that Time/Forbes/Fortune/The WSJ/NYT (oh yea, and equity markets) have ALL called the ‘death of Nike’ at different points over the past 40 years.
8) Nike proved everyone wrong – every time. And that was when the scale of investment inside Nike paled in comparison to what we see today.
If you want to be short Nike into a potential gnarly print and weak guide – knock yourself out. It’s a consensus call, tho will probably be right on the day. But the next multi-year consistent earnings beat begins in 2018. Don’t be short that – full stop.
We’re hosting a Black Book preso on June 21 in advance of Nike’s print – w read on the industry, Adidas, FL, DKS, UA, LULU, etc…
Call Details
Time: Wed June 21 at 11AM EDT
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Confirmation Number: 13664029
Live Video Link: CLICK HERE