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Our monthly Fire Best Buys Now are designed to highlight our team’s three favourite, most timely Buys from our growing list of growth-focused Fire recommendations, to help Fools build out their portfolios.
“Best Buys Now” Pick #1:
Nike (NYSE:NKE)
- Nike is the world’s leading sports shoe and apparel business – though it’s currently facing some near-term challenges.
- The company is clearing the decks under CEO Elliott Hill’s “win now strategy” – moving back toward sports and releasing innovative products that set the company apart, while reducing emphasis on lifestyle categories.
- Along with improving its products, the business is also rebuilding relationships with wholesalers after a direct-to-consumer push under former CEO, increasing investments in marketing, and reducing promotional activity.
- Sales grew by 1% in Q1, after facing challenges in Greater China (which declined by 9%), though North America sales grew by 3% (including 11% wholesale growth). The company is aiming for a recovery in China, including sending basketball stars as ambassadors to help drive growth.
- The company manufactures in China which has seen it exposed tariffs enacted by President Trump’s administration, contributing to gross margins falling by 320 basis points to 42.2%. It will reduce imports from China by the end of FY 26.
- While the company is struggling due to a mix of internal and external factors, its share price reflects this – down 10.7% in the last 12-months – compared to a buoyant S&P 500. We remain optimistic about the strength of the brand, its products, and marketing capabilities. The new chief executive is prioritising new designs and retailers seem to be responding well to these efforts, including new running footwear, which should help it regain momentum.
