Latest news with #PegasusPremium
Yahoo
29-05-2025
- Business
- Yahoo
Dick's CEO Lauren Hobart Says Nike Is a ‘Very Important' Strategic Partner Following Q1 Results
As Dick's Sporting Goods wraps up a strong first quarter, analysts are eager to hear more about the retailer's position on Nike Inc. as the company brings Foot Locker into the fold later this year. According to Randal Konik, equity analyst at Jefferies, Nike stands to benefit from Dick's momentum, as the Swoosh focuses even more on its wholesale distribution. More from WWD 'Ensuring a Safe and Secure Shopping Environment Is Key for Retailers,' NRF Says Jalen Brunson Will Get His First Nike Kobe Sneaker Release Later This Year The Best Nike Sneakers Releasing in June 'Dick's management emphasized that its relationship with Nike remains 'strategic,' expressing continued satisfaction with the partnership,' Konik wrote in a research note on Wednesday. 'This signals frequent collaboration and alignment between the two companies, reinforcing Nike's importance within Dick's merchandising strategy.' Konik added that the sporting goods retailer 'remains bullish' on Nike's innovation pipeline, particularly in running and lifestyle categories. Dick's cited strength in Nike's running pipeline, where the Pegasus Premium and Vomero 18 sneaker styles have been selling out online. This momentum supports Nike's product-led recovery strategy, the analyst wrote. This echoes the sentiment shared by Dick's Sporting Goods president and chief executive officer Lauren Hobart, who affirmed on Wednesday's first-quarter earnings call with analysts that Nike is 'a very important' strategic partner for the company. 'Nike continues to perform really, really well for us,' Hobart said. 'As we look to the future, we've heard about some distribution changes. [But] one thing that you can say about Nike time in, and time out, is that they are very good at segmenting their products. So, we expect minimal overlap with some of the new distribution. There's a lot of great stuff going on.' Looking ahead, footwear remains a 'very strong business' for Dick's Sporting Goods, according to its CEO. Konik added that this is a 'positive signal 'for Nike, which is a key brand in Dick's footwear assortment. Moreover, a better-run Foot Locker under Dick's leadership would be a net benefit for Nike by reinforcing its distribution strategy and solidifying its position in athletic retail, Konik said in a note following the announcement earlier this month that Dick's would scoop up Foot Locker in a $2.4 billion deal. Konik said earlier this month that as Nike CEO Elliott Hill strengthens an already robust relationship with Dick's, the consolidation of the two retailers 'could enhance Nike's retail presence and brand consistency.' He noted that Nike leads footwear sales at Dick's, a key growth category that accounts for 28 percent of the sporting goods retailer's business, while the Swoosh represents half of Foot Locker's sales, 'underscoring the strategic importance of both channels to Nike's wholesale strategy.' This comes as Dick's Sporting Goods saw net sales increase 5.2 percent to $3.18 billion in the first quarter of 2025, up from $3.02 billion in the same year-ago period. Net income in the quarter ended May 3 was down 4 percent to $264 million, or $3.24 per diluted share, compared with $275 million, or $3.30 per diluted share, a year earlier. Excluding one-time items related to its acquisition of Foot Locker, Dick's posted earnings per share of $3.37. Looking ahead, the company expects net sales for the full fiscal year 2025 to be between $13.6 billion and $13.9 billion, with earnings per diluted share in the range of $13.80 to $14.40. For now, Dick's outlook doesn't include acquisition-related costs or results from the Foot Locker merger, but does take into account any current tariff-related expenses. Best of WWD All the Retailers That Nike Left and Then Went Back Mikey Madison's Elegant Red Carpet Shoe Style [PHOTOS] Julia Fox's Sleekest and Boldest Shoe Looks Over the Years [Photos] Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
02-04-2025
- Business
- Yahoo
Why Nike Stock Tumbled 20% in March
Things went from bad to worse for Nike (NYSE: NKE) last month as the struggling sportswear giant posted disappointing results in its fiscal third-quarter earnings report and warned that its performance would get even worse in the fourth quarter. The blue chip stock fell to a seven-year low as it continues to lose market share to faster-growing upstart brands like Deckers' HOKA and On Holdings and investors grow impatient with the turnaround strategy under new CEO Elliott Hill. Additionally, the company is facing macroeconomic pressure around tariffs and weak consumer discretionary spending. As a result, the stock lost 20% in March, according to data from S&P Global Market Intelligence. As you can see from the chart below, the stock declined over the entire month, but the descent accelerated after the earnings report. Nike actually beat analyst estimates in the quarter, but that was little consolation to investors amid the declines in revenue and profit, and its guidance also called for its performance to get worse in the fourth quarter. Revenue in the third quarter fell 9% to $11.3 billion, while earnings per share tumbled 30% from $0.77 to $0.54. Gross margin declined from 44.8% to 41.5% as the company attempted to clear inventory in legacy classic styles like Dunks to reestablish its full-price strategy. Management expects its performance to trough in the fourth quarter, declining around 14%, and gross margin to fall 400 to 500 basis points, showing profits will be down sharply. There were some silver linings in the quarter. The company returned to growth in running, touting strong demand for the new Pegasus Premium, and Japan and Latin America returned to growth, despite an overall decline in revenue in the Asia-Pacific Latin America region. Management also noted a challenging macroeconomic environment, a sign that a turnaround could take longer than expected. The investor frustration with the stock is clearly understandable, but CEO Elliott Hill seems to have the right strategy to drive a turnaround in the business. The company is reestablishing relationships with its wholesale partners, and investing in performance product, seeing sports and performance gear as a halo for the brand. Nike still dominates basketball and it has unrivaled roster of sponsor athletes. The company should eventually get back on track, but it's hard to consider buying the stock while its earnings are plunging. Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $285,647!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $42,315!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $500,667!* Right now, we're issuing 'Double Down' alerts for three incredible companies, and there may not be another chance like this anytime soon.*Stock Advisor returns as of April 1, 2025 Jeremy Bowman has positions in Nike. The Motley Fool has positions in and recommends Deckers Outdoor and Nike. The Motley Fool recommends On Holding. The Motley Fool has a disclosure policy. Why Nike Stock Tumbled 20% in March was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
24-03-2025
- Business
- Yahoo
Nike Stock: Is the Worst Over?
Investors hoping for a turnaround at Nike (NYSE: NKE) will have to wait longer. The world's leading sportswear company posted yet another quarter of declining revenue and profits and told investors that things would get worse in the fiscal fourth quarter, the current period. The quarter marked Nike's fourth straight period of declining revenue as sales fell 9% to $11.3 billion, dragging earnings per share down to $0.54, well below the $0.98 it reported after adjustments in the quarter a year ago. While the results were ahead of analyst estimates, investors were unimpressed by the quarter. The stock hit a five-year low and was down 5% in Friday afternoon trading. Excluding the pandemic crash, the stock was trading at its lowest point since 2018, underscoring the crisis the business now finds itself in. Nike brought longtime company veteran Elliott Hill out of retirement to replace John Donahoe as CEO after Donahoe's focus on performance marketing, direct-to-consumer sales, and classic styles seemed to lead the business astray. Hill's turnaround strategy, which is focused on reestablishing relationships with retailers, putting sports back at the center brand, and returning to a pull marketing strategy sounds like the right prescription, but the numbers continue to disappoint. While Nike did beat analyst estimates, its Q4 guidance indicated that performance would get even worse. The company sees revenue falling in the mid-teens, which includes the effect of unfavorable shipment timing, and it expects gross margin to fall 400 to 500 basis points, which includes the effect from new tariffs. There was a silver lining, however. Management expects the headwinds from the Win Now turnaround strategy, which is focused in part on streamlining inventory, to moderate after Q4, indicating that the financial recovery should begin in earnest in fiscal 2026. Nike's revenue declined in nearly every category, but there were some bright spots that investors shouldn't ignore. Its running business grew by mid-single digits, driven by new products like Pegasus Premium and Vomero 18, as well as the continued success of Pegasus 41. The recovery in running is key, as that's an area where Nike has struggled, losing share to upstart brands like On Holding and Deckers' HOKA. It also returned to revenue growth in Japan and Latin America, though overall revenue in the Asia-Pacific Latin America (APLA) segment, which does not include China, was down 4% on a currency-neutral basis. Finally, its performance footwear and apparel business delivered growth, which was offset by declines in sportswear and the Jordan brand. However, the strength in performance gear is also promising, as it shows that new product launches are resonating. The performance category is where the company needs to shine in order to win athletes and influencers and create a broader halo effect for the brand. Nike is still working to overhaul its inventory and get back to a full-price business model, though that process seems likely to take at least a few more quarters. Nike's guidance was ugly, and there are real questions about the brand's ability to regain the business it's lost. Fashion trends are always changing, and competitors like On and HOKA are gaining market share quickly. The company hasn't given guidance for fiscal 2026, but Nike seems like it will be in a good place to rebuild margins after this year's reset. With the exception of the quarter when the pandemic started, Nike just reported its worst gross margin in a decade at 41.3%, and Q4 is set to be even worse. In other words, this may be the "kitchen sink" earnings report that signals that the company's performance is finally bottoming out as it dumps all the bad news on investors to reset expectations. While the macro environment is fluid, Hill does seem to have the business pointed in the right direction. Investors don't like being told to be patient, and they'd like to see improving results now rather than later. It's understandable for the stock to be hovering around seven-year lows after several quarters of declining revenue. However, the sell-off also presents an opportunity. With the margin reset, inventory clearance, and focus on reestablishing retail relationships and a full-price business model, Nike seems likely to be in a better position in a year from now. Hill has been at the helm for just six months, and the changes he's made will take some time to play out. Patience could pay off for investors here. 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Reuters
20-03-2025
- Business
- Reuters
Nike posts smaller drop in quarterly revenue on holiday demand, new launches
March 20 (Reuters) - Nike (NKE.N), opens new tab posted a smaller-than-expected drop in quarterly revenue on Thursday, benefiting from a holiday season bump and an uptick in demand for its new Pegasus Premium and Vomero 18 sneaker lines. Shares of the Air Jordan maker rose nearly 3% in extended trading. The sportswear giant has discounted key lifestyle franchises Air Jordan 1, AirForce 1 and Dunk as it looks to clear out old inventory and focus on innovation. That sweetened the pot for buyers, who had waited all year to splurge during the holiday season. Newly launched sneakers, fast-tracked by new CEO Elliott Hill, also performed well enough to give the sportswear maker some breathing room after several quarters of weak demand. The company's third-quarter revenue fell 9% to $11.3 billion, compared with analysts' expectation of an 11.5% drop to $11.01 billion, according to data compiled by LSEG. Nike's $2 billion savings plan including job cuts, tightening the supply of some products and reducing management layers helped it report a quarterly profit per share of 54 cents.
Yahoo
19-03-2025
- Business
- Yahoo
Nike to post worst revenue fall in 5 years on stagnant demand
By Nicholas P. Brown and Ananya Mariam Rajesh (Reuters) - Nike is expected to post its steepest revenue decline in nearly five years in its quarterly results on Thursday, as its new products failed to open the wallets of Americans reluctant to snap up non-essential items like sporting goods and clothing. Downloads of Nike mobile apps for the quarter were down 35% from a year earlier, according to market intelligence firm Sensor Tower. Foot traffic at Nike stores was down 11%, according to data compiled by Raymond James. Foot Locker, a major Nike retailer, disclosed in its earnings March 5 that promotional pressures would hurt its profit margins in the year ahead. This signaled the impact of discounts imposed by Nike to clear out unsold inventory. Nike products comprise more than 60% of Foot Locker merchandise. Those recent indicators illustrate the long road ahead for Nike and its new CEO Elliott Hill, who assumed the top job in October. Nike shares have slid 19% since September 20, following Hill's appointment. Rival Adidas, meanwhile, has seen its stock tick up slightly over the same period. Under Hill, Nike began an ambitious turnaround, though Morningstar analyst David Swartz said one or two snazzy new styles will not be enough to get the sportswear giant back on track for sales growth. "It needs to create a whole new franchise, like a family of products that add billions in sales," Swartz said. "That takes years." Nike is expected to post a revenue decline of 11.5% to $11.01 billion in the third quarter, according to data compiled by LSEG. It would be the steepest fall since the 38% decline Nike reported in fourth quarter of fiscal 2020 during the pandemic. Its earnings per share is expected to come in at 29 cents, down sharply from 77 cents a year earlier. Investors told Reuters they were keen for details on Nike's efforts to rebuild relationships with retailers and clear out unsold inventory. "It continues to be a 'show-me' story," said Jay Woods, chief global strategist at investment banking firm Freedom Capital Markets. "The question is, do investors have the patience?" Nike's inventories were $8 billion in the quarter ended November 30, according to the company. Some of Hill's moves so far - including the launch of running shoes Pegasus Premium and Vomero 18 in January and February; a new partnership with womenswear company Skims; and its first Super Bowl ad in 27 years - drew praise from John Nagle, chief investment officer of Kavar Capital Partners LLC, which holds Nike shares. The planned women's line with Kim Kardashian-owned Skims "would be pretty good for the business," said Nagle, "if they can even just step into that market and be a significant player alongside the Lululemons and Biores." The Super Bowl commercial, conceived with ad agency Widen + Kennedy, was intended to reach women shoppers, and to demonstrate Nike's marketing prowess and regain its pop culture relevance. The spot featured top female athletes like Caitlin Clark, the basketball superstar who has been central to the newfound surge in popularity of the Women's National Basketball Association. Sign in to access your portfolio
