2 months ago • 2 mins
What’s going on here?
Nike’s better-than-expected results weren’t exactly a three-pointer, but they showed the sports retailer can still dribble like the best of ‘em.
What does this mean?
Nike’s stock price has been stuck on the bench lately, so Thursday’s better-than-expected results will have investors going wild. Or mildly enthusiastic, at least. Stateside sales were lower than this time last year, which isn’t ideal seeing as it’s Nike’s most important market. But they were still beyond what cautious investors had predicted. Plus, business was better overseas: Chinese sales were up 12%, if you strip out the impact of currency movements. And by building in decent margins, Nike wrangled a better-than-expected overall profit, calming analysts’ worries about mounting inventory levels.
Why should I care?
The bigger picture: Grab an energy drink, stat.
Nike was on a tear a while back, with sports buffs sharpening up their gym outfits after a couple of years spent doing press-ups in their bedrooms. But once the excitement wore off and the sofa looked more appealing than the treadmill, Nike’s profit started slipping. Now, its stock price has drifted below pre-pandemic levels, a sign that investors believe Nike’s past its peak, rather than just temporarily out of breath. But with promises of sharp new releases ahead of next year’s Olympics, there could still be gas in the sports titan’s tank.
Zooming out: Life isn’t Yeezy.
Still, Nike’s issues are nothing compared to Adidas’s: the European rival’s bottom line has barely budged for a decade. That could have something to do with the twosome’s choice of spokespeople. Nike’s sports stars have been pulling in cash for the brand, but Adidas’s partnerships with big music names have been more hit or miss – and they haven’t been without controversy, either. Still, Adidas is a major name with a loyal fan base, so it could live up to its tagline: “impossible is nothing”.
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