Despite the fact that it is still ranked number one in its field, engineering a rebound may take time. In its latest quarterly report, management did not provide any guidance. For that, we will have to wait for the new CEO to strategize the company’s way forward.
Some of the declines Nike suffered during its fiscal first quarter were actually intentional — the expected results of the company moving away from some of its previous strategies. For example, it reduced the amount of inventory going into its direct-to-consumer channels so it could shift more to its retail partners. It is also working to strengthen its innovation program, which entails cutting some of its older products.
Nike operates in a competitive environment, and competitors such as Lululemon and On Holding have taken market share away from it in recent years. Management said its spring order books were roughly flat year-over-year — lighter than expected — and warned that the company will have to get through a difficult period before it can move forward and begin to regain some of that lost market share.
Long-term investors may want to follow Akman into the Nike deal, but don’t make it a big deal, and don’t expect him to reward you overnight.
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Jennifer Seibel He has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Lululemon Athletica and Nike. The Motley Fool recommends Holding and Skechers USA. At The Motley Fool Disclosure policy.
Bill Ackman Investing in Nike Stock: 3 Things Investors Need to Know Originally published by The Motley Fool