Posts Tagged ‘ Nike ’

Nike Business On Fire; China Accelerates

December 23, 2015
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Nike Business On Fire; China Accelerates

Nike (NKE) is in the midst of a strong 3-year run; operating trends are at cycle-high growth rates, health & wellness as a category is growing around the world, and Nike’s brand stewardship is incredibly on point across all major sports. The stock price followed results this year, up over 37% ytd, and the 35th best performer in the S&P 500. Nike’s earnings are expected to grow 16%, so part of the strong return has been valuation re-rating. Nike’s forward P/E multiple reached the 30s, uncharted waters for the firm relative to its history. Keys to the successful Nike business model:   The outsourcing of manufacturing to China enables a capital light business model, allowing Nike to focus on the truly value added aspects of design, innovation, and branding. Nike...

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Tim Cook & Apple Confirm China Strength

October 28, 2015
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Tim Cook & Apple Confirm China Strength

Apple posted an excellent Q3 result; 48 million iPhone shipments exceeded expectations, gross margin approached 40% (32 bps above last year), and EPS grew 43%, an impressive growth rate for the largest company in the world by market capitalization. Mac computer units grew 3% despite a 11% contraction in the overall global PC market. Iterations of new products are coming with updated Apple watches and the Apple TV in time for the holidays, and the Apple brand remains hot. Tim Cook emphasized strength within China, more so than past conference calls, in order to remove one particular bear case which transpired this summer; a sharp slowdown in China and inventory glut. With Nike posting its fastest growth rate in China in several years, and Apple sales doubling, two data...

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Nike Bone Crusher; China’s Economy isn’t Collapsing

September 25, 2015
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Nike Bone Crusher; China’s Economy isn’t Collapsing

Maybe the economy in China isn’t collapsing. Nike reported a bone crusher of a quarterly report last night; a stark wake-up call for China bears. Nike management credibility is higher than that of the Chinese government, and this earnings report, at this juncture, is stunningly good. Nike segment reports its future orders by geography, adjusted for currency movement, and the results out of China are the strongest since 2012. Nike is surging in China again. Impressive because China isn’t a new market; Nike is entrenched, and has invested, and developed the brand in China for a solid 15 years. The 27% china orders growth accelerated relative to last quarter’s 22% growth. The acceleration took place despite the China A-shares collapse, the renminbi devaluation, and lots of negative press on...

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Nike’s Strong Results Indicative of Solid Global Consumption

September 23, 2011
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Nike’s Strong Results Indicative of Solid Global Consumption

Nike (NKE) reported an excellent set of results after the close last night. Headline earnings were $1.36 vs a street consensus of $1.21 (12.4% beat). I listened to the Nike earnings conference call and was really impressed with the strong business trends relative to the obvious dislocations we are seeing in the market and talk of global recession. Nike is one of the world’s strongest global brands and has a diversified business across both developed and emerging markets, across product categories such as footwear, apparel, and equipment, and across income demographics. If there was a global slowdown taking place right now it would be something that should impact Nike’s business. Basketball and running sneakers are mature categories in most countries. Nike’s earnings were driven by strong sales trends around...

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