Nike all-in on sports unit, back to ‘being Nike again’: Analyst

Sportswear giant Nike ( NKE ) reported second-quarter financial earnings that topped analysts’ estimates for both revenue and profit. Bernstein Senior Analyst Aneesha Sherman joins Market Domination Overtime to evaluate Nike’s growth prospects.

Sherman describes it as “a good quarter” for the sportswear brand, although it is “unexpected”. She highlights that the most promising signal came from the press release’s message to “take immediate action, get back to the sport, get back to our roots, be Nike again.”

She notes that historically, when Nike experiences a bad year, it refocuses on its athletic foundation, “which has kind of been lost in the last few years” amid its innovation efforts. Sherman emphasizes that new CEO Elliott Hill should prioritize the company’s distribution strategy to make a meaningful impact.

“Elliott Hill’s background is perfect for this,” she explains. With Hill’s 30-year tenure at Nike, he is “intimately familiar with the channels,” making him “the perfect person to lead this return to distribution.”

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This post was written by Angel Smith