Rachel Warren

Both of those were actually a slight beat compared to what analysts were looking for.

But I think what we're seeing in terms of the market's response, which I think is close to an eight-year low at this point, really reflects a lot of deep anxiety over their upcoming guidance.

They're projecting a 2% to 4% sales decline in this upcoming quarter.

That's also against the backdrop of a 20% anticipated revenue drop in Greater China, which has been a significant market for them.

We're also seeing a time where management is intentionally pulling back inventory of some of their classic footwear franchises to try to clean up the marketplace.

That's putting pressure on some of the numbers.

There's also margin pressure from tariffs.

That is still a notable factor for a business like Nike.

There are some kind of pockets of resilience that maybe suggest a bit of a U-shaped recovery for the business.

You know, the performance running category has been making strides, so to speak, North American wholesale business as well as Nike's really kind of re-embracing its former relationships with its retail partners.

Management is expecting positive gross margins by Q2 of their fiscal 2027.

I think for now, though, we're really waiting to see, and I think this is the market's sort of tepid response to their results showing that, how can Nike out-innovate rivals like On Holding and Ahoka while managing a lot of the trade costs and other headwinds they're facing as a business right now?

And I think we still need a few more quarters to see how that's all going to shake out.

Yeah, that's right.

I mean, these reports of about 30,000 layoffs, it's kind of staggering.

I mean, one number I saw, it's about 18% of their global workforce.

They're very much caught up in a high-stakes AI arms race, if you will.

They've committed $50 billion in CapEx for fiscal 2026 to build out the data centers needed for clients like

OpenAI and Nvidia.

They beat expectations on the top line in the recent quarter, but they're dealing with negative free cash flow.