NIKE EARNINGS THIS WEEK: WHAT YOU NEED TO KNOW

Nike (NKE) is gearing up to release its earnings this Thursday after the market closes, and all eyes are on the iconic brand. Year-to-date, Nike’s stock is down a staggering 59% from its all-time high. This dramatic drop raises the question: Is Nike facing insurmountable challenges, or is this a golden opportunity to invest in a brand that embodies the "Just Do It" spirit?

Nike is one of the best-performing consumer goods stocks of all time. Shares are up more than 46,000% since the company's 1980 initial public offering and would have turned a $1,000 investment into more than $767,120 during that time (with dividends reinvested).

Challenges and Opportunities

While Nike has faced headwinds, particularly with underwhelming overseas sales, there are compelling reasons why investors might want to consider adding Nike to their portfolios. Here are some highlights:

1. Legendary Brand Ambassadors: Nike continues to maintain partnerships with sports icons such as Michael Jordan (“His Airness”), LeBron James (“The King”), Serena Williams, and Derek Jeter. These associations not only reinforce the brand’s cultural relevance but also drive its global appeal.

2. Strategic Partnerships: Nike’s stronghold in professional sports is undeniable:

• A $1.9 billion NFL partnership through 2028.
• A $1 billion MLB deal extending through 2030.
• Representation on 42 of the 68 NCAA teams.

3. Market Leadership: In 2023, Nike held the top spot in sales among the world’s largest athletic apparel, accessories, and footwear companies. Despite its recent struggles, the brand remains a global powerhouse.

4. Leadership Shake-Up: To address recent challenges, Elliot Hill has come out of retirement to take the helm as CEO. This move signals a commitment to steering the company back on track.

5. Institutional Confidence: High-profile investors have shown faith in Nike’s future:

• Iconic fund manager Bill Ackman recently purchased 3 million shares.
• Ken Griffin’s Citadel Advisors added 1.1 million shares to its holdings.

A Discount Worth Considering?

With Nike’s stock currently trading at a 56% discount from its peak, the question remains: Is now the time to buy? For many, including prominent investors, the answer seems to be a resounding yes. Nike’s enduring brand strength, coupled with strategic moves to address its challenges, makes it a compelling option for long-term investors.

As the company prepares to release its earnings, the stakes are high. Whether you’re a seasoned investor or a fan of the brand, this could be an opportunity you don’t want to miss. For me, it’s a clear yes—and a reminder that sometimes, the biggest wins come from embracing the "Just Do It" mindset.

Trading Considerations for Nike Earnings:

Sell a 70/65 Vertical Put Spread

or

Sell a 90/95 Vertical Call Spread

For those who want to own Nike Sell Cash Secured Puts at 70 or below

Disclaimer

This is not financial advice. Please do your research or consult a financial advisor before making investment decisions.