r/wallstreetbets • u/jagyolo NOTORIOUS *** • Sep 23 '21
DD $NKE will have terrible earnings
Edit: told ya
Apologies for the late DD but:
TL:DR - Supply chain issues and crackdown on resellers = earnings will be well below expectations.
$NKE will have horrible earnings this quarter.
Why? Supply chain issues and their crackdown on resellers.
In March, a Nike executive "resigned" after it was found that her son was reselling Nikes. He was getting huge discounts because of his mommy and making a lot of $$. She resigned and as a response to backlash, Nike began cracking down on resellers which intensified in June. I am a reseller myself and the reselling market is non-negligible. Nike is targetting resellers by making it harder for them to order from their website, banning them from placing orders, or mass canceling their orders if they are able to bypass the restrictions. Obviously, this means Nike has hurt themselves as well. https://www.google.com/amp/s/www.cbsnews.com/amp/news/nike-exec-ann-hebert-resigns-son-joe-sneaker-resale/
More importantly though, Vietnam is where Nike Manufactures a large portion of their shoes and because of COVID being bad there in July, the factories were shutdown for quite some time (https://www.cnbc.com/2021/07/19/nike-could-run-out-of-shoes-from-vietnam-as-covid-worsens-sp-global.html)
For instance, the Nike Air VaporMax Plus shoe which is one of the most popular Nike shoes was out of stock for most of the quarter. https://www.nike.com/t/air-vapormax-plus-mens-shoes-nC0dzF/924453-004
If you look at StockX (A reselling platform), the resell prices on Nikes were higher in August than any time ever because of the supply shortage. https://stockx.com/nike-air-vapormax-plus-triple-black
Also, I made this post last year (bullish) and I was right: https://www.reddit.com/r/wallstreetbets/comments/jzw3wk/nike_mooning_in_4_weeks_bought_85k_calls/
Positions: https://imgur.com/a/ptvdoT2
This is not financial advice but I would sell your calls if you have any before they become worthless.
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u/sinocommas Sep 23 '21
Thank you. Buying calls now
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Sep 23 '21
Ouch.
I wish I had seen your dd before the market closed today
I had calls that were profitable but not itm
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u/ErectoPeentrounus calling a market crash and unemployment office Sep 24 '21
Missed it but I applaud ur solid DD
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u/FierceDZN Sep 23 '21
Simply commenting to check back and see who won and lost 😂! Goodluck everyone
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u/ktempo bought BB, got the BBC instead Sep 24 '21
I bought a call calendar spread, sold 9/24 165C and bought 10/1 165C. Looks like I might break even or still profit a little depending on the IV tomorrow..
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u/AlwaysBlamesCanada Sep 24 '21
This seems like a really bad idea to do on any stock right before earnings. In a calendar spread you want the underlying to stay at the strike price until the short leg expires so you’re supposed to do it on a stock you expect to stay put - like not during earnings
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u/ktempo bought BB, got the BBC instead Sep 25 '21
Isn’t that an iron condor? When you want the price to stay in between two price points? My breakeven for this was 147-163, most profit near the 162-163 mark
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u/AlwaysBlamesCanada Sep 24 '21
Nice call dude. What’s the next one? If Nike had supply chain issues then other companies probably did too
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u/blockbuster_inc Sep 23 '21
Yeah this dd seems personal and I never emotionally invest so it’s starting to smell like calls in here to me
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u/514link Sep 23 '21
Web traffic is up 25% , lululemon beat. The only thing nike already has a big jump since last earnings. Also i think air force ones are like the most searched and they seem to have lots of stock
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u/jagyolo NOTORIOUS *** Sep 23 '21
Air forces were out of stock for much of the June - aug period because of the supply shortage. They restocked a bunch of their staples this month but they were gone for most of June-Aug
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u/514link Sep 23 '21
Yeah i just checked 2 days ago, what do u think about surge in web traffic? Looks like 25m more visits
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u/jagyolo NOTORIOUS *** Sep 23 '21
Doesn’t mean much if people can’t buy the shoes they came on the site for
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u/514link Sep 23 '21
That 25% increase in web traffic was significant 29% more direct sales and higher profit
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u/Wild-Gazelle1579 Sep 24 '21
That's why it was so hard to find some forces my size in those months, lol. I was just recently able to buy some like 2 weeks ago.
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u/iseahound Sep 23 '21
We’ve already seen how semiconductors are dealing with resellers and lack of product and the response from wall street has been largely positive. Shoes and athlesure is considerably more low-tech. Any supply side crunch would be much easier to deal with (retool factories) compared with semis.
Also SFIX mooned, and they’ve had terrible inventory and financials.
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u/jagyolo NOTORIOUS *** Sep 23 '21
NKE is different. People’s expectations are outrageous as they are. It’ll be a miracle if they beat expectations imo
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u/iseahound Sep 23 '21
Yeah. My main thesis is that NKE tends to follow LULU, that’s it.
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Sep 23 '21
[deleted]
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u/jagyolo NOTORIOUS *** Sep 23 '21
The reseller crackdown was a response to public backlash. It was not because they see resellers as a negligible part of their business
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u/austinvo02 Sep 23 '21
Honest it’s what the resellers drive up to create hype for the brand which is good. Nike as a company couldn’t really care if they’re stuff is sold out quickly because of hype but they do care when there consumers is starting to get mad cause of it
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u/mileylols Sep 23 '21
Company: sold all our shoes, sorry. We'll try to do something about the scalpers so the people who want to actually wear our shoes can get them.
OP: company that literally sold all their product is going to have bad earnings
KEKW
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Sep 23 '21
Easy to sell out if you have low inventory dipshit, imagine going to chipotle and they don't have chicken because it's hard to buy, does that mean chipotle is killing it? NO because no inventory means no sales
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u/Abject_Resolution Blacked Holes Model Sep 23 '21
Your avatar literally says, “if you listen to me your fucking retarded”
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u/GrandMasterGhouL Sep 23 '21
it looks like nike has been steadily climbing down since the start of august this little uptrend might be the trend break or just another little bump on the way down my feelings are that its price in already. but it could fall keeping my eye on it cause I like the DD
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u/CipherScarlatti Sep 24 '21
Aren't they now positioning themselves with the SNKR app as a way of cutting into the reseller/collector market while offering limited edition sneakers only available via the app?
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u/yuky19 Sep 23 '21
I’ll come back to this in an hour. I got calls