저자: UnrivaledInvesting진행자 · 외국인
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나이키 실적 악화(매출 -9%, 매출총이익 -16%, 영업 관련 이익 약 30% 감소)를 짚고, 데커스·온·스케처스 등 경쟁사에 점유율을 뺏기고 있다고 분석. 빌 애크먼 등 가치투자 펀드의 매수는 인정하나 본인은 미보유이며 성장 근거·밸류에이션 모두 확신이 낮다고 평가. 턴어라운드가 성공하면 상승 여지는 있으나 실패 시 추가 하락(약 50%) 가능성도 제시.
다듬은 글
in just the past three years you can see that Nike stock has lost around 50% of its value that's quite a haircut just going down down down getting pummeled and yet you could see some value oriented funds like the Norway Sovereign wealth fund norest Bank buying over a billion dollar position Bill amman's persing Square buying over1 billion position 1.4 may he hit over 10% of his portfolio you could also see another value oriented shop Capital World buying nearly a $ billion position so in this video I'm going to walk you through what what I suspect these value oriented funds see why they're potentially buying these billion doll Stakes now uh why the stock continues to get pummeled in my own personal take thinking about Nike you know in the years ahead if you enjoy if you enjoy educational investment content I do appreciate you hitting that Thumbs Up Hit That subscribe button I apologize if my voice sounds a little funky I'm fighting a little bit of a head cold and so the first step is to analyze the income statement and what I'm going to try to do here is is sort of show you almost like a case study in that if you look at an income statement in within you know 30 seconds to a minute you can quickly understand what's going on with this business you know you could quickly see sort of the the core narrative no matter what management tells you the numbers speak a lot to the truth and the truth is 9% decline in revenue for the most recent quarter and 9% drop for their year-to dat results that in of itself is a red flag because this is an industry you're talking about shoes you're talking about apparel you're talking about a brand and so if you're saying the underlying industry should be growing let's say mid to low single digits and they're declining by 9% that's a red flag that they are losing market share and in this video we're going to talk about some of the other players that they're they are definitively losing market share too and possibly why so that's the very first data point but that it doesn't stop there the next data point is you see their gross margins actually and their gross profit declined by about 16% so not only were their sales weak but they had to up the promotions up the discounts to move the inventory so they prior bets on the goods and brands that would resonate with consumers completely missed the mark and that's why you've seen a change in management new CEO come in and this you know this is a as I've already called out a big red flag not only in that the sales are weak but their gross profits are plummeting nearly 16% or 16% the most recent quarter so what are they doing from a cost perspective they're investing in terms of stabilizing the business getting them on the right foot uh where you could see their actual demand creation expense so thinking about the marketing that actually went up 8% so obviously this is going to have a huge impact on profitability if your gross profits are declining by 16% and you're investing increasingly investing in the business and then they overhead expenses you know the people declined by about 13% so not able to keep up with the 16 % drop that does translate into just a huge plummet in underlying profitability and you can see around a 30% drop in earnings uh so far year-to date and also during the most recent quarter this is a very tough you know number to swallow and frankly if it weren't the Nike brand I suspect that the stock would be down a lot further on these results because normally if a company posts a 30% drop uh if it just doesn't have this incredible brand then it starts Trading at I'd argue a single- digigit type of multiple because then folks Wonder are you really going to be around in a few years but that's not the case with Nike Nike clearly investors and a lot of people still believe that this business will recover and it'll be stronger and bigger in the future another key point from looking at this income statement they're continuing to buy back shares to it's to a small degree and this is one point that I don't care for which is that they're upping their dividend the amount that they're returning to shareholders frankly in this environment M where your underlying sales and your profitability is just collapsing uh I think saying hey we're going to pay more of a dividend all things are good it's just a it's the wrong signal to send in my opinion you know I what I would do is keep the dividends stable and say you know maybe we're in a position where the stock price will really plummet and we'd rather have that cash is dry powder for you know share repurchases or future Partnerships that might really Drive growth in in the future you know that's how at least I would think about it and you could see they're losing market share on a broad-based Global Perspective this isn't just one market like China shutting them off this is being shut down around the world North America Footwear down 9% Europe Middle East and Africa down around 11% greater China 177% um Asia Pacific and Latin America down 12% so they're apparel brand including excuse me their Footwear and their Converse brand Converse down 18% this is just a brutal period where they are rapidly losing market share around the world and so who are they losing market share to you know one of which I'm I'm going to look at the public companies because their data is available one of which is Deckers and they own the Ugg brand as well as Hoka the Hoka running shoes uh you know their Hoka shoes grew by 24% in the most recent quarter you know that suggests these running shoes they're resonating with consumers UGG brand I'd say is sort of a Lifestyle brand it's not really going Toe to Toe with Nike um you know maybe it is but it's it's it's really uh the Hoka that's that I would say is chipping away market share in terms of the running uh exposure that Nike historically had then you also have on Holdings so this is a premium this is more of a luxury brand that's growing very quickly growing around 30% uh for their most recent year over 30% in the most recent quarter you know very high a direct consumer online penetration rate you know around 50% of their sales and so this is once again a premium you know athleisure athletic uh driven shoe that's clearly taking market share from Nike where folks say hey maybe I want to signal that you know I can afford these really nice shoes and it's instead of Nike which has sort of diluted the brand perhaps over time maybe it's on Holdings or maybe it's Hoka over time that folks are going to I would say on is more of the premium and then more of the lifestyle just everyday you know shoes Sketchers skx they're also growing relative to Nike they recently posted around 12% growth 133% for the most recent quarter and they're growing a broad-based wholesale as well as direct consumer so the challenges Nike face I would say really do reflect that consumers don't like the previous bets that they've been making over the past year or two uh where you can see you know it's it's not just one competitor and and also uh I believe New Balance that's that's privately held supposedly they've been rapidly taking market shares as well so from a running perspective and from a lifestyle perspective there's a lot of brands that are just growing much faster than Nike uh that is something that investors should think about so what is what is Nike doing to sort of reverse this trend one of which is new marketing campaigns they F they saw their first Super Bowl ad in the last 27 years this brand is the you can't win so win that's the the marketing scheme the sowin campaign personally I think this marketing campaign is dumb they didn't consult me but you know like I then again I'm not running around wearing my Nikes uh I I I'd love to hear your take on on this on this new marketing campaign it doesn't speak to me um I'm curious if other people are like oh yeah this is this is a cultural moment this is epic this is like the next Jordan I just don't see it I think they're still missing the mark personally um next up they are sort of looking to Blitz the the brand awareness domination you know every single venue where a lot of eyeballs will be there whether or not it's the NBA or the NFL you're going to be seeing someone wearing the shoes and I'd say that is their biggest you know strength their asset is this brand where at these sporting events you just see so many people wearing the shoes that it is enough of the cultural Zeitgeist you get it in your head that oh well this famous athlete's wearing it therefore I'm going to buy it I'm going to buy I want to buy my Nike this famous performer singing and dancing doing a little jig and he's wearing you know his Nike songs therefore I want to you know buy you know have have my Nikes as well so I I think there's that element and I don't think that's completely disappeared because they still have the budget to effectively buy these people to wear their their goods um and I I think that hasn't that hasn't changed and you're going to see that with athletes and this is why I don't think it's trading at a rock bottom multiple so what are my thoughts as we we look at Nike I don't own shares in Nike I'm sort of exploring the bull case you know why some of these smart investors have been buying recently also quick plug recently Henrik direct quote subscribing to your platform is the best financial decision I've made in my life and also thank you for letting us lock in the rate for the subscription this follows Sam who recently said Daniel just reup my annual subscription after one year of being in the community the subscription has paid for itself many times over out unrival investing I will be raising the rate for the premium tier later this year so now is the time to lock it in when I think about Nike I have a very simple checklist you will see this often in my videos lined management compelling valuation obvious growth potential no blowup risks and a win-win setup when I look at this it's a very straightforward list however 90% of the companies that you know come across this list I'd say fail and you know you have the Phil Knight you know family background uh still has you know a strong influence if you haven't read Sho dog I highly recommend it because you know it did reflect sort of Phil Knight's tenacity and I think his his his his family still has you know strong influence uh over the company um but it it it did reflect you know think about what he did is he found this niche in terms of running and really plowed ahead with it and was able to beat out Puma um and Adidas I think um and that's that's what Phil Knight did you know selling car shoes from the back of his car um but when I think about this checklist you know the the one that really jumps out of me as as not passing is this obvious growth potential uh where you know I i' prefer something where management can say yeah here's why definitively this is going to be you know up so much in the years ahead or why it's just the valuation is just so compelling that it just jumps off the page and I think looking at at Nike I'm not able to see something that does it for me now for some billion dooll funds that have to deploy Capital they might go yeah this is this is you know sort of a reasonable bet to make so not surprising to see the bill akman of the world make it 10% plus of his portfolio because he's saying yeah this is a worldclass brand it's probably durable it's probably going to be bigger and stronger in 5 to 10 years from now probably um so maybe it makes sense to buy you know on on sale on clearance when it's down 50% and so what are some of the growth you know trajectories some some attack vectors that they're considering they have announced a partnership with uh Kim Kardashian's skims brand uh I think they've yet to announce the products themselves and should come out later this spring but you know talking about wanting to be body obsessed and you want to look good and feel good taking sort of the edgy the sexy aspects of skims uh and the Kim Kardashian brand marrying it with Nike maybe you could have some sort of joint venture or partnership that really does result in in uptick in in growth now I I suspect this would be a lower margins for them because you would have that share but you know we'll see you know it it's it's unclear exactly how that plays out another growth you know attack Vector launching new shoes to directly address the losses to New Balance and on running and Hoka you know talking about the Nike Pegasus premiums which you know they're talking about supercharges responsive cushioning with a triple stack of our most powerful running Technologies so they're they're trying to say yeah the the Hoka shoes that are supposed to be super comfortable and the on-running shoes that are supposed to be super comfortable yeah we we're putting up our own and that will be coming to the marketplace soon as well so there are clear growth you know vectors that could reinvigorate the business that said in the media term they are still facing very real challenges their next quarter they're still expecting to see a significant Revenue decline even worse than their most recent quarter maybe this is because you have new management trying to temper wall Street's expectations but either way this is a tough reset this is a tough pill to swallow talk about a mid teens type of Revenue decline so maybe they post only 10% and that beats expectations so you start getting into a you know uh type of beat beat expectations Cadence that could result in the stock you know is starting to reverse the trend but they are still expecting not only a tough decline but also a huge GE margin decline as well around four to 5% decline in margins and then you also do have the uncertainty around you know tariffs around China and Mexico and how that will impact the business in the year ahead so still huge negative despite potential attack vectors that could grow the business personally as I think about the valuation around a hundred billion do market cap you know I It's just tough for me um you know I don't have super high conviction to say oh yeah definitively 5 years from now this business is is for sure going to be much much bigger and if you assume just sort of flat over the next 5 years and assume that the M multiple comes down to let's say 15 times and their margins are sort of around 10% this is this is I'd say a lowcase scenario this is this assumes that management does not succeed with any of their turnaround initiatives then in that case you're still talking about roughly another 50% decline so that that doesn't strike me as just super compelling now you could argue I'm just being too Draconian and clearly the value investors that have recently started buying are saying yeah management will not accept this type of scenario they're clearly betting on a 5 to 10% organic growth scenario uh in which case you do see you maybe the multiple stabilize around where it historically bottomed you know around 20 times maybe and then if you're able to get something like that then you can get something like 100% type of return especially if you're able to get back into that 10% type of annual growth for me personally that's just too hard um because especially looking at it it's still nowhere near any sort of like deep value multiple this isn't trading at like a six times free cash flow where you're like is this brand brand even going to be around in a few years from now and so that does reflect that Wall Street does still strongly believe that this business is going to be bigger and will be around 5 10 years from now so the key aspects of this business which is that athletes performers they're still going to be wearing it and they're still going to have the budget to bribe these you know to encourage them to wear it uh at these events uh and you know in these different sporting arenas and so you know you do have that Dynamic personally too tough for me um but I you know I think it is kind of interesting you know one one company shoe company that I haven't talked about I don't own but I I you know attempted to explore is just sort of as an example is the Crocs brand which also owns hey dudes I I think it it may have done a deal um with uh this actress Sweeney I think is her name um where you know the the appeal there is that the Wall Street and investor um confidence and the durability in this business 5 to 10 years from now is much lower and so therefore the earnings multiple that they're assigning Crocs based on their current earnings so that CX is only around six to seven times earnings so it is sort of an interesting case study because you know net you know as as you look at Nike Nike is nowhere near that because Wall Street saying despite this decline we still believe in the durability so I would say from a psychological perspective you haven't really gotten to a true like this is just awful you know puke it up sort of moment with Nike you've gotten to a point where investors are just frustrated down 50% and and it's not any it's not near that sort of Crocs sort of valuation of six times where people are going I don't you know even though Gro is growing slightly faster um than net than than Nike so I hope this video talking about Nike sort of the challenges they face the the prospects of a turnaround uh have been helpful for you if they succeed it's very it is easy to see you know if they're able to succeed with a 5 to 10% type of growth uh you know turnaround in the years ahead it is easy to see type you know 100% type of upside from here personally I just would rather bet on things that are a little easier where I don't have to say oh yeah there's a you know this this turnaround may or may not happen um I'd rather you know have something where management says here's the rinse and repeat rinse and repeat playbook for you know we grew 15% this year and why we think we're going to keep growing 15% for the next few years because you know this is why our product is unrivaled and this is the market that we're tapping into so it's that's just my personal journey I could understand though why other value investors have started picking up shares I hope this video has been helpful for you thanks so much for watching unrivaled investing
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