Deborah Weinswig, CEO of Coresight Research joined Cheddar News to break down Nike’s earnings report.

Deborah Weinswig, CEO of Coresight Research joined Cheddar News to break down Nike’s earnings report. "I think they've set themselves up very well for a calendar 23."

Nike Surges on Earnings Beat

joining me now to discuss is Deborah Weinswig Ceo, of course, site research welcome. Thank you so much for joining us. You got to ask, you know, what do you make of these earnings reports so far? Well, it was certainly a tremendous difference and a change in direction from the prior quarter where we had seen, you know, I think a surprise on the higher end and inventory, we really saw them work through a lot of that into this quarter. We saw performance in china improve, which is, you know, the third most important market. We continue to see the innovation agenda also come through in terms of how they approach the quarter and the look ahead. Okay, well last quarter, Nike ended with inventory of 44% over last year, which led to lots of discounting, which I wasn't complaining about. I was happy but what about investors, should investors be cautious about this? You know, I think that they said that basically as we go into this new calendar year that will continue see supply chain improve and as a result will continue, see inventories work their way down. They were 9.7 billion in the prior quarter, down to 9.3 billion. And the quality of the inventory improved as well. When you look at the strength of the North American market a lot that was driven by promotions. So it's, it's not all bad. Sometimes have excess inventory. I think what we can look at it, How will they manage through that? And I think, you know, protecting the brand has been at the top of their list all the while giving consumers great discounts and continue to build new partnerships as well. So I think that what we've seen is with their, you know, challenges that they faced. They've handled them very well in a challenging environment. I think they've set themselves up very well for a calendar 23. Yeah, but how was that going to really entice consumers? You know, it's good that the investors may be a little bit happy about that. But what about consumers? Well, I think it goes back to right there had been this news right in the prior quarter that their inventories were everyone expected these great deals and I think that there were good deals, but I think that they manage the brand and I think what we're seeing is a lot of innovation, you know, footwear was up 25%. We continue to see that being kind of as their leading that brand and as we look at their global portfolio, they really do have, you know, I think a very distinct image and a distinct marketing in each and every market, you know, through lives streaming through what they've done the metaverse and that's continuing to grow the brand through for new customers and extending it with, you know, existing customers, you know, as it's always been, Nike is a big player in china and has relied on the country to drive itself and profits, but that spinning has really been under pressure. Could we maybe continue to see this pressure continue, especially as covid restrictions continue because it's been locking down and delaying a lot of the supply demand there. Yeah, I think that, you know, as we continue to see, you know, changes in that market and you know, things starting to open up a bit that, you know, they had a much better order on the second quarter than the first and we think that momentum will continue into calendar 23. What I think was a real positive with with what we saw was singles day and you know, they were the number one sports brand. They saw double digit growth and I think that was a real positive for the look ahead. I think that this brand has really kind of gained a lot of insights into consumers and to Gamification from the china market and brought that to the west. So this continues to be a very important market for them. Well, you know, after Adidas cut ties with Kanye West and the Easy brand in october, how is this going to position Nike in a sector in terms of competition and demand, especially this holiday season, it's like this is their chance to step in. You know, it's so funny, we did this very detailed analysis comparing Nike to Adidas and what you see is, you know, even with some of the challenges and inventory, they've done a much better job almost a full point higher in terms of inventory turns, they have definitely, you know, kind of focused on this this innovation agenda. And I think that's coming through in terms of how they're reaching consumers in terms of their direct business. And you know, they really moved back, right, We've seen that over In the past I'd say 18 months to control the brand. Certainly they've got this partnership with Dixon, you know, footlocker and continue with that. But they're taking more control of the brand in their own hands and because they can deliver more personalized experience for the consumer, I think the consumers really feeling that and it really does kind of create I think not only for the consumer but for investors like, you know, it's it's a new Nike if you will. Okay, that sounds like a good sign for me. All right, thank you so much. Debra wants to ex ceo of course, site research.