July 9, 2018

NKE – Market expectations are for improving Uniform ROA, but management has concerns about their digital, costs, and their initiatives


  • NIKE, Inc. (NKE:USA)currently trades near historical highs relative to UAFRS-based (Uniform) Earnings, with a 30.9x Uniform P/E, implying bullish expectations for the firm. However, management has concerns about their digital, costs, and their initiatives
  • Specifically, management may have concerns about the potential of the SNKRS app, and might be exaggerating the opportunity presented by 2X Speed. Furthermore, they might be concerned about the sustainability of growth driven by NIKE Direct as well as their ability to continue to execute on digital strategies, and might lack confidence in their ability to maintain SG&A expenses near expected levels

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