Robert Way
Introduction & Investment Thesis
Nike (NYSE:NKE) reported its Q4 FY24 earnings on June 27, and the shares plunged over 10% as the retailer cut its full-year guidance and expects sales to decline in the mid-single digits in
Nike Q4 Earnings: The Sneaker Leader That Missed The Innovation Train
Summary
- Nike reported Q4 FY24 earnings, with revenue growing 1% to $51.4B, driven by strength Performance products while profitability and cash flows improved.
- However, Lifestyle revenues declined in Q4, along with shrinking digital sales and uneven performance across geographies as macroeconomic uncertainty remains.
- The management has outlined that FY25 will be a year of transition as they refocus their innovation efforts on Performance products, while it optimizes its product portfolio and reignites brand momentum.
- While sales are expected to decline in the mid-single digits in FY25, I believe that its valuation multiple is still extended and will remain under pressure, making it a “sell”.
Amrita runs a boutique family office fund in beautiful Vancouver, where she leads the investment strategy for the family fund. The fund's objective is to invest capital in sustainable, growth-driven companies that maximize shareholder equity by meeting their growth-oriented goals. In addition, she also started her own award-winning newsletter, The Pragmatic Optimist which focuses on portfolio strategy, valuation, and macroeconomics in concert with her husband Uttam Dey who is also a contributor on Seeking Alpha. Prior to cofounding her fund, Amrita worked for 5 years in high-growth supply-chain start-ups in downtown San Francisco, where she led strategy. During her time in the Bay Area, she also worked with venture capital firms and start-ups, where her efforts led her to grow the user acquisition business. During this time, she was introduced to investment portfolios and was able to maximize returns for clients during the pandemic. The cornerstone of Amritas work rests on democratizing financial literacy for everyone and breaking down financial jargon and complex macroeconomic concepts into formats that are easily digestible but more empowering than the typical investment thesis. Her newsletter has been featured as the Top Newsletter in Finance on popular newsletter platforms and she aims to bring her ideas to Seeking Alpha as well.
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