May 7, 2018

NKE – Market expectations are for improving Uniform ROA, but management has concerns about their initiatives, innovation, and North American operations


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      • NIKE, Inc. (NKE:USA)currently trades near historical highs relative to UAFRS-based (Uniform) Earnings, with a 28.9x Uniform P/E, implying bullish expectations for the firm. However, management has concerns about their initiatives, innovation, and North American operations
      • Specifically, management may have concerns about their leadership restructuring, and may be exaggerating the success of their Consumer Direct Offense initiative, particularly in Greater China. Furthermore, they may lack confidence in their innovation efforts in the Running category, and may be downplaying concerns about declining growth in North America

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