🦧 just sell it
🤔 beating earnings isn’t good enough
nike had a good report card
nike's first fiscal quarter revenue was released to be up 4% up $12.69b, beating estimates ($12.27b)
nike's net income was down 22% to $1.5b, but still, that comes down to $0.93 eps as opposed to $0.92 (expected)
“new degree of complexity”
that is what nike is facing at the moment, according to the company's cfo matthew friend on the earnings call last thursday
the problem child: supply chain headwinds (like we’ve never heard of it…)
inventory in north america grew 65% from last year
that is not good
that means that the amount of goods nike has produced (or raw materials ready for production) but is not sold yet (aka the company's holding on to it, not making revenue off of it yet) is soaring high
matthew friend said that the company has decided to "more aggressively liquidate" that inventory
just a thought (imo)
nike sells shirts, tennis shoes, coats, gym bags, like, a whole lotta things, and i think that may make the problem worse in this crappy-supply-chain environment
when inventory’s piling up like that, a huge reason could be seasonality
i.e. if nike has so much summer shorts left to sell, they’d be seasonally late, if they were to try to sell all the remaining inventory, say, in october, november, and even december
they’d likely have to sell at a huge discount to motivate the sale at scale, and that won’t be attractive for nike’s income statement
on the other hand, primarily-shoe companies like skechers and deckers outdoor could be less vulnerable to seasonality when it comes to product backlog and inventory accumulation
that is based on very minimal research, and im not entirely sure tbh
with that said though, skechers and deckers are down 27% and 12% respectively, while nike's down – way more – 48% for the year
nike: NKE 0.00
skechers: SKX 0.00
deckers outdoor: DECK 0.00
💡 something im thinking about
that's all, folks 🐒
