Mama Mia! Is Nike About to Trip on a Banana Peel?

It's a Me! Mario Your Financial Plumber!

Hello everyone! It's a me Mario! I usually spend my time rescuing Princess Peach and stomping Goombas but today I'm a diving into the world of… stocks! Specifically Nike (NKE). I hear it's not all 'Super Mario Odyssey' over there. Apparently they're expecting a big I mean a REALLY big jump or maybe a face plant after their next earnings report. The options market is pricing in a move of about 9.5%! That's a bigger than Bowser's belly! Let's see what's a cooking in the Koopa Troopa cauldron.

Nike's 'Win Now' Strategy: More Like 'Spin Now'?

So Nike has a new… wait no an old CEO Elliott Hill. He's back to try a 'turnaround strategy' called 'Win Now.' Hmm sounds a bit like when I try to 'Win Now' by grabbing a Starman and running through everything. But the alternative data it's a telling a different story. Sales are down 14.95% which is worse than the whole darn industry! But hey at least the foot traffic is up 4.3%. Maybe people are just window shopping while dreaming they can jump as high as I can... It's a complicated like trying to explain taxes to Yoshi.

China Syndrome: Not the Movie the Sales Numbers!

Mama mia! It seems like China is giving Nike the Bowser blues. Sales there are down a whopping 17%! Even my trusty steed Yoshi is saying "bleh" to those numbers. Europe's also not doing too hot. The only good news is North America where running and training categories are doing okay. Maybe everyone's just trying to outrun their problems... or Bowser. Who knows? But with revenues dropping faster than I fall down a pit without a mushroom it’s a 'wahoo' kind of trouble.

Double Digit Declines?! That's Worse Than Missing a Jump!

The forecast for the next quarter is... not good. A "mid teens" revenue decline? That's a worse than when Luigi gets all the good power ups by accident! Apparently even the holiday season wasn't enough to save them. Running and training are doing alright but the biggies like Sportswear and Jordan Brand are taking a dive. It's like trying to race with a flat tire on my kart! Looks like competitors are gaining ground too. Time to power up and show them what a we're made of!

Gross Margins Going Down the Drain... Like Me in World 1 2!

Gross margins are expected to drop faster than I lose rings when I touch an enemy in Sonic between 400 to 500 basis points! That’s a lot of coin down the drain! They’re blaming markdowns tariffs and higher product costs. It's like Bowser is throwing everything he's got at them! The long term recovery depends on them selling stuff at full price and coming up with some amazing new ideas. Because if not it's a game over man! (Not really they'll just need a 1 UP Mushroom).

Investing Strategy: Maybe Just Stick to Mushrooms...

So what's the bottom line? One strategy includes betting on a big swing in the stock price but limiting the risk involved. It's like using a warp pipe to skip levels but you still have to fight Bowser in the end. The analysts think Nike is worth around $80 $85 but it could go up to $90 $100 if things improve or down to $50 $60 if things get worse. Maybe I should stick to collecting coins and mushrooms. At least I know those will always come in handy. Wahoo!