In short: Loses Mbappé to On; Sechan says the group has to wait for the consumer (37:35–38:18). "Nike's crafted a niche" (Haaland, Ronaldo), and challengers "forced Nike to wake up," but "you need to get real disposable income up a little bit… Now is not that time." Down big this year.
In short: Passing mention — the product in his first Muse test: it searched "far and wide" across sites and reviews for the best price on a specific Nike shoe.
3:35I don't even have to have the Open Table app on my phone. It can go in and just book things on my behalf right from this text box. Another thing that was interesting is it doesn't just do restaurant reservations, but it also does the commerce in a serious way. I asked it to look up Nike shoes, very specific ones that my brother-in-law was looking for, and it searched the web far and wide.
In short: Niles names it as his own losing position, and uses it to make the point that "cheap" is not a thesis: "just because a stock's down a lot — one of my big disasters this year, we'll see how the rest of the year plays out, is Nike. It used to be a market share leader. I don't think the oil situation has helped it. Obviously other brands have come in. They had years of mismanagement. We'll see what happens." Delivered inside the argument for holding conviction loosely and changing as the facts change.
Niles volunteers Nike as his own losing position this year — unprompted, in the middle of an argument about why he does not hold things forever. That is what makes it worth recording: it is a live position being used as evidence against his own process, not a short pitch.
The diagnosis he gives is that Nike "used to be a market share leader" and has since faced competition from newer brands plus "years of mismanagement," and that a stock being down a lot is not by itself a reason to own it. In other words, the cheapness was the trap, not the thesis.
The transferable part is the rule he attaches to it: hold "strong conviction but loosely held," and change when the facts change rather than when the price recovers.
29:04And so I think you have to have strong conviction but loosely held. And that's the way you want to think about it. And just because a stock's down a lot — one of my big disasters this year, we'll see how the rest of the year plays out, is Nike. It used to be a market share leader.
In short: Named twice on the same side. Lebenthal puts Lululemon "right up there with Nike" in the no-touch group, and Bill Baruch uses it as the breadth evidence for exiting Amer Sports: "we see, looking across the space from all angles of high end to low end, you look at Nike and Lululemon and other names, they've struggled." Nobody offered a bull case, an entry level or a catalyst.
Nike is named twice, by two people, on the same side — grouped with Lululemon in Lebenthal's no-touch list, and used by Baruch as proof that the weakness spans the whole price range from premium to mass market.
That breadth is the argument. If the top end, the middle and the discounters are all struggling at once, the problem is unlikely to be any one company's execution. Nobody offered a level to buy or a catalyst to wait for.
In short: His own losing position, offered unprompted as proof that a cheap former market-share leader is not automatically a hold: "one of my big disasters this year, we'll see how the rest of the year plays out, is Nike. It used to be a market share leader. I don't think the oil situation has helped it. Obviously other brands have come in. They had years of mismanagement. We'll see what happens."
Nike is Niles' own losing position, volunteered rather than extracted — "one of my big disasters this year." He offers it as the honest illustration of his contrarian belief that buying and holding a fallen market-share leader is not a strategy.
His account of what went wrong is unglamorous and cumulative: it "used to be a market share leader," competing brands have taken share, and there were "years of mismanagement." He adds that the oil environment has not helped — input and freight costs run through a physical-goods business in a way they do not through software.
The conclusion he draws is about process rather than about Nike: past dominance tells you nothing about future returns, so hold views with "strong conviction but loosely held," and change when the facts do.
56:40IBM was a buy and hold, of market share leaders that then went into trouble. But you always have some company that makes it through, like Microsoft has done great through three different decades, right? But that's one company. And so I think you have to have strong conviction but loosely held, and that's the way you want to think about it. And just because a stock's down a lot, like one of my big disasters this year, we'll see how the rest of the year plays out, is Nike. Right.
In short: His worked example of overdetermined failure — retrospective, not a forward call. Down 75% from the peak, and the hundreds of explanations (product, competitors, Kaepernick, macro) all miss that "the P/E ratio at the peak was like 70 and now it's 20." "At high valuations, failure is overdetermined… it was just really expensive and anything at that point could have been consequential enough to bring it down" — it "got pecked to death by ducks."
Nike here is a teaching case, not a recommendation — he offers no view on the shares today.
The stock is down about 75% from its peak, and the popular explanations blame the shoes, the competition, politics or the economy. Kedrosky says everyone is missing the arithmetic: the price-to-earnings multiple was around 70 at the top and is around 20 now. Most of the fall was the market simply agreeing to pay less per dollar of profit.
His general rule from it: at a very high valuation, failure is "overdetermined." There are dozens of small, individually unlikely ways to disappoint, and when a stock is priced for perfection any one of them is enough. So the specific cause you argue about afterwards is almost arbitrary — it "got pecked to death by ducks." That's exactly how he expects the AI complex to unwind.
28:36This is why Nike's down." And I use this line a lot when I'm talking about AI because people always are on about, well, what's going to cause this moment to implode? And I said, here's the thing, and Nike is a good example. At high valuations, failure is overdetermined in a statistical sense, meaning that there are so many ways to fail, all of which are low likelihood.
In short: "Nike's been a mess." Belsky: "Nike's got other operational issues that are going to continue. It's too big." Named in the same broken-apparel complex Brown wants avoided entirely — and the reference point for On's claim to a better product at a better price point.
"Nike's been a mess." Brian Belsky's diagnosis is short and structural: "Nike's got other operational issues that are going to continue. It's too big" — scale that once guaranteed distribution now makes it slow to respond as smaller brands take share. It sits inside the apparel complex Josh Brown wants avoided entirely today, and is squeezed further by the off-price discounting Terranova flags as evidence of an oversupplied branded-apparel market.
In short: Rossbach (January pick): turnaround intact — 72c quarterly EPS in line with his underlying expectations (a 52c tariff-refund benefit drove the beat); performance sports the bright spot; a dozen innovative new footwear styles coming in 2027.
In short: "A perpetual turnaround story… these results won't move the needle one bit." Q4 beat (adj EPS 20c vs 13c est, rev $10.97B) but revenue still fell 1% YoY and management "sounded very cautious," so the stock went down after hours. "The numbers aren't terrible, but they certainly don't tell a turnaround story."
Nike has been billed as a turnaround for years and still isn't turning. The latest quarter actually beat expectations on both earnings and revenue — but revenue was still down 1% versus a year ago, and management sounded cautious enough on the call that the stock fell afterward. Eisman's read: "the numbers aren't terrible, but they certainly don't tell a turnaround story." A beat that doesn't change the trajectory isn't a reason to own it.
3:46Nike reported their quarter after the close on Tuesday, June 30th. Now, Nike is a perpetual turnaround story, and frankly, I think these results won't move the needle one bit. On the positive side, the company reported adjusted EPS of 20 cents versus 14 cents last year and versus 13 cents expected. So, a nice beat.
In short: Cited as a discretionary-consumer name hurt in the K-shaped economy when fiscal support flows to essentials, not discretionary. Illustrative reference.
15:13that's tough though, look at Nike, look at General Mills, right? When you say do you
15:20want to get into the names or I can wait, describe the characteristics. I'll describe the characteristics. There are certain parts of the consumer market that are
In short: Q4 EPS jumped 5x to $0.72 — but included a $986M one-time tariff recovery (IEEPA) worth ~900bps of gross margin; adjusted EPS was ~$0.20 (vs $0.13 consensus), not the blowout the headline implied. Revenue −1% to $11.0B (−4% cc). Reported gross margin 49% (+9pp) is a "margin mirage" — underlying ~40%, near reset lows. North America +3% (wholesale +10%) and Nike Running (5th straight double-digit quarter) are the first real proof the "Sport Offense" reorg works; China −12%, Converse −32%. Outgoing CFO: "not expecting the environment to improve meaningfully" over six months. ~28x fwd, −30% YTD (5th straight annual decline). Still a "show me" story. (Recap, not a stance call.)
Nike's latest quarter looked, at first glance, like a triumph — reported earnings per share jumped five-fold. But almost all of that was a one-time refund: Nike got back about $986 million in tariffs it had previously paid, and that windfall flattered its profit margin by roughly nine percentage points. Strip out the refund and the real earnings were about $0.20 a share (a small beat), and sales actually fell 1%. The article calls the flattering headline gross margin a "margin mirage" — the true underlying margin was around 40%, still stuck near the low point of Nike's multi-year slump.
Underneath, there are the first genuine signs of a turnaround: North America is growing again as Nike patches up relationships with the retail stores it had abandoned, and its running category has posted five straight quarters of double-digit growth — early proof that a big reorganization (grouping staff by sport) is working. But China is shrinking fast as local brands take share, the Converse sneaker brand is collapsing (sales down 32%, an exit is being floated), and management openly warns things won't improve much over the next six months. With the stock at about 28 times expected earnings and down 30% this year, the article's verdict is "show me" — real proof of a recovery, not just a tariff-driven headline, before believing it. A recap, not a call.
In short: "Another lemon" — a great global brand undone by a string of missteps he can't fully explain; competitors took share and the brand isn't saving the stock. Owns it only because he never sells; wouldn't add.
Nike has a great global brand — everyone wears the shoes at the World Cup — but the stock is "another lemon." Competitors have taken share, and Harris admits he can't fully explain why a company with such a strong brand keeps making missteps; "every time they do something, it's not the right thing."
He owns it only because of his strict "never sell" rule (and a 25-40-year time horizon), not because he'd buy more. He uses turnarounds like this to make the point that a great brand alone doesn't fix a broken business — you need an operator who systematically repairs it rather than just stripping it for a quick stock pop.
34:29this week and it's Nike, another lemon, which I own. So careful what you say, Paul. Um, but should I buy it? I don't know. Should I answer and just say no? Don't bother. You own it, so you probably have a better So, you know, as that's when I learned a lesson about a value trap, right? So, well, as a as a as a brand,
In short: "A turnaround story for 2 years that has not turned around." After hosting three Evercore consumer analysts June 22, one of them — Michael Benetti, who covers Nike — downgraded it buy→hold the next day "because there is just no evidence that the turnaround is taking hold. Quite the opposite." Down 21% in Q2.
Nike has been billed as a turnaround for two years — and it still hasn't turned. After Eisman hosted three Evercore consumer analysts, the one who covers Nike (Michael Benetti) cut his rating from "buy" to "hold" the very next day, because there's simply no evidence the comeback is happening — "quite the opposite." The stock was down 21% for the quarter.
The lesson Eisman draws is a discipline: a turnaround thesis is only worth holding while there's evidence the turn is actually underway. When quarter after quarter shows none, the right move is to step back rather than keep waiting — the same trap he flags with Lululemon, another "turnaround that's just not turning."
8:11Moving on, there was some news on Nike this week. Nike has been a turnaround story for 2 years that has not turned around. On Monday, June 22nd, we hosted three consumer analysts from Evercore, one of whom, Michael Benetti, covers Nike. And on Tuesday, Michael downgraded Nike from buy to hold because there is just no evidence that the turnaround is taking hold.
In short: The cautionary comp Amber raises: a washed-out brand on a big capitulation score "but Nike's been a dog… a value trap." He uses it to distinguish a genuine momentum-suppressed value (Diageo) from a real value trap.
49:35because the young generation is not drinking as much alcohol. So all the bearish trends are well-known. You've got good value. You've got a Hall of Fame brand. You've got a stock that's absolute, like on a big capitulation score. It's like Nike. It's been absolutely washed out. But Nike's been a dog. I followed that and I was like, God, it was just a value trap.
In short: Cited among consumer names diverging badly from the tech complex.
6:06It's like a I call it like an 8% 10% nominal GDP grower over that side. But then if you look at McDonald's, look at Darden restaurants, look at Home Depot, look at Nike, the divergence on the consumer side, the restaurants, the retailers are all in flames. Uh we did a little look this morning where conversation the suppliers to Home Depot are all down 10 20 40%.
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