Nike Stock Just Jumped 13%. Should You Buy the Stock on the Way Up?

Résumé détaillé

Nike (NYSE:NKE) is working hard to get back up to speed in athletic wear, where it's been losing ground to several newcomers. Its stock is 79% off its all-time high from 2021, but…

Nike (NYSE:NKE) is working hard to get back up to speed in athletic wear, where it's been losing ground to several newcomers. Its stock is 79% off its all-time high from 2021, but it's been rising recently, and it's up 13% since it bottomed out in October.

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Nike is by far the largest company of its type in the world. It has incredible brand power and consistently ranks among the world's most valuable fashion brands, despite its athletic focus.

However, it made some strategic decisions a few years ago that altered its model with brutal results. Instead of innovating, it began to rely on what it thought were proven franchises, cutting its wholesale relationships to focus on its direct-to-consumer business. It thought it could rely on its brand to keep loyal customers coming.

Instead, customers found other brands that offered great products, and Nike sales have been declining. In fact, they're roughly where they were five years ago.

New CEO Elliott Hill has been working on a recovery, and while management still expects sales to decline this year, there are rays of hope.

Nike's women's basketball business has increased 500% from fiscal 2022 through 2026, for example, and gross margin, which was hampered by last year's tariffs, improved 0.60 percentage points to 42.8%.

Hill identified three specific avenues toward growth. One is creating scarcity around some of its franchises, like the Jordan brand, to revitalize the premium feel and generate more full-price sales.

The second is gaining traction in China, where sales were down 26% from last year in the 2027 fiscal first quarter (ended Aug. 31). Nike is aiming to boost its image there as well by being more deliberate about wholesale partners and concentrating on premium branding.

Début de l'article, extrait de Yahoo Finance. Pour lire la suite, ouvrez l'article chez le média.