You know…
Most people don’t know where shoe titan’s name, Nike, comes from.
The answer to that question can be found in Greek mythology…
As Nike is the Greek goddess of victory.
She wasn’t one of the more prominent gods of that pantheon – which is why the shoe brand was vastly more popular than this once-worshipped deity.
It was a great idea invoking the goddess of victory as the name of your shoe brand…
But right now, that name is proving to be ironic – as Nike seems to be fighting a losing battle.
A shift in its business model could be this planet-recognized brand’s demise…
And if that’s the case, it may want to rebrand its name as Mud.
Keep reading to see what they changed…
Nike have been around forever.
I even wore them as a kid…and still do.
It went from relative obscurity to one of – if not THE premier shoe brand on the planet.
That said…
This titan of the athletic shoe industry has had a rough couple of years.
It had that whole boycott debacle a few years ago…
And as we move closer and closer to a possible recession – people could think less about fashion and more about function.
However, all that being said, Nike’s recent revenue and profit numbers still beat expectations last quarter…
As the line did well in Europe, the Middle East, Africa, Asia and Latin America.
Have you noticed something missing from that list?
Yes, North America, and for good reason…
As this most recent quarter was the third-straight where demand for Nike’s products exceeded supply.
Normally, this would be a GOOD thing – but because lockdowns both home and abroad impacted a whopping 2/3rds of the company’s business – it watched its North American sales fall 5% from the year before.
Which means that over the past few quarters – American and Canadian sales are down 19%.
Even worse…
Nike isn’t particularly positive going forward…
As officials just revealed that they didn’t expect revenue to grow much – if at all – this quarter.
A lot of this problem could be connected in Nike’s change in their business model…
As its shift toward more of a direct sales model as opposed to the wholesale model it used to build its brand – the model of pushing its brand to outside retailers and letting them sell their shoes.
And it’s a shift that is help keeping sales stagnant – as its direct sales revenue was up 7% while their wholesale revenue was down 7% the past two quarters.
The risk of employing this strategy is: Pulling back from retailers like Footlocker – leaves them with more shelf space in its stores…
Space that is now going to competitors like Adidas, Reebok and others.
Which is an even bigger threat to Nike’s overall numbers – as retailers lean toward giving discounts…
And the worse the economy gets – the more cash-strapped shoppers start looking for quality brands at lower prices.
Factor into this that Nike also announced that it was leaving Russia over the Ukrainian invasion – and Nike could soon find itself short on revenue.
This isn’t good for shareholders…
And definitely not good for the company’s immediate future.
Hopefully, the brand can pull through…
Because if it doesn’t turn things around soon – it could end up on the trash heap of history like so many others that have come before it.
Regardless of what happens…
There’s a lot of turmoil in the markets – it’s why now is the perfect time for you to subscribe to GorillaTrades.
Our recommendations come from numbers and data of the companies – not that of the overall market…
So, despite what you may be seeing – there are plenty of winners out there – and we’d love to have you on board for the next round.
We understand that there are those who feel they can go it alone – and that’s fine – just know that we’re here when things start to look bleak…
And we’re willing to help you find the best stock opportunities available.
Either way, you may want to watch how things play out for Nike…
It should be interesting either way it goes.
“Dream audaciously. Have the courage to fail forward. Act with urgency.” – Phil Knight
