Is Nike a Buy, Sell, or Hold in 2025?

Core Viewpoint - Nike is facing significant challenges in regaining its previous momentum due to declining sales, increased competition, and a need for product innovation [2][4][5]. Group 1: Company Performance - Nike's fiscal first-half revenue for 2024 was $23.9 billion, with footwear accounting for two-thirds of this total [3]. - In the fiscal second quarter, Nike experienced a 9$0.78, indicating a decline in profitability [4]. Group 2: Market Challenges - The company is facing macroeconomic pressures, a lack of innovative products, and increasing competition from brands like Deckers Outdoor's Hoka and On Holding [5]. - Nike's stock has dropped nearly 32% over the past year, contrasting with a 21% gain in the S&P 500 [10]. Group 3: Strategic Changes - Nike has appointed Elliott Hill as president and CEO, who aims to enhance marketing efforts and focus on sports-related products [7][8]. - The new strategy includes improving relationships with retailers and reducing emphasis on direct-to-consumer sales [8]. - Hill acknowledges that the turnaround will require time and investment in product innovation and marketing [9]. Group 4: Valuation Insights - Nike's current price-to-earnings (P/E) ratio is 22, down from over 30 a year ago, while the S&P 500 has a P/E multiple of 30 [10]. - Despite the lower valuation, the stock is selling at a discount due to worsening results amid strong competition [11].