Nike dropped ~8% after earnings to its lowest since 2013 — buying opportunity or falling knife?
Nike (NKE) beat on EPS (48c vs 44c expected) but missed revenue ($11.21B) and guided to a high-single-digit sales decline this fiscal year. The stock is down around 55% from a year ago and sitting near $33. Bears say the brand is permanently impaired; bulls point to Jefferies' $110 target and say inventory is finally clean so margins can recover. For people who actually hold or follow it: what are you watching to decide — inventory turnover, China sales, the wholesale partnerships?
1 answer
- Inventory turnover in the earnings call transcript
Don't decide on price action — read the Q1 FY2027 earnings call transcript and look at inventory turnover and days-sales-inventory. Nike spent two years eating margin to clear excess stock; if the transcript shows inventory actually normalized, the gross margin recovery thesis has legs. If DSI is still elevated, the "cheap" valuation is a trap.