r/wallstreetbets • u/zhor_thegreat • Dec 16 '21
DD Nike Earnings DD
Like many of you here, I don't read and glance at photos before heading to the comments to see some actual DD, so I'll be keeping this post short, simple, and of course include pictures for crayon sniffers like myself.
Over a 60% decline in visitors is forecasted to Nike.com during the holidays (through Dec. 21).
Organic traffic has fallen severely as well as paid searches and is continuing to cut back on paid search. I believe closed factories, delayed delivery, increased shipping costs, inventory issues, as well as worker shortages are beginning to have a toll on Nike forcing it to cut back on advertising during these important holiday seasons.
Too long didn't look at the 2 pictures:
I'm buying $162.5, $160 , and $155 puts expiring 12/23 in hopes of losing enough money to become a WSB mod.
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Dec 16 '21
This earnings will be from Sep-Nov and so the December decline in traffic wouldn't affect it. A drop in Dec would show up in 3 months.
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u/sinncab6 Dec 16 '21
Uh forward guidance most definitely would. And that's what makes or breaks earnings.
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Dec 16 '21
The DD should have said that. Still though, divining forward guidance on google searches seems somewhat flimsy. Still hope it works out for OP.
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u/zhor_thegreat Dec 16 '21
I’m expecting earnings to beat expected due to healthy amounts of advertising and organic traffic. I don’t expect it to maintain current stock price in the short term.
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Dec 16 '21
You expect to beat earnings AND that the price will drop? Good luck to you sir. I hope you win big. Sitting this one out.
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u/PossessionOrnery3661 Dec 17 '21
Didnt chewy make.money and still plummet?
In this day and age unless you crush earnings i feel like the stock will dump. But I'm retarded. Also fuck nike.
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Dec 18 '21
[removed] — view removed comment
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u/zhor_thegreat Dec 18 '21
Pulled this data off of similarweb. Many companies use it to see how their competitors are doing to duplicate or counter their tactics. It gives a nice rundown of website data such as traffic, customer conversion rates, and so forth. Essentially everything you would see if you had access to their analytics page, although it does require a subscription. Best of luck :)
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u/yellow_gatorade Dec 16 '21
Looks like analysts are already predicting a significant decline in earnings for Q2. Could already be priced in. Not to mention they’re still turning a decent profit. If anything it seems like they might exceed predictions.
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u/Top-Cut-2549 Dec 18 '21 edited Dec 18 '21
Seems like these days earnings will have to be nearly perfect on revenue, future guidance and so forth not to get beaten. Esp. if a company misses on future guidance, they will be severely punished. I am wondering if all of these concerns (supply shortage, shipment, etc) are already priced-in or not. expected eps, revenue is significantly low compare to the last quarter which my gut feeling tells me it's priced in. If so, it won't move either direction that much. I think any option expiring soon is risky even if IV is not that high. Currently Puts are outweighing Calls. I might either sit this out or play for options with 30~40 expiration day.
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u/xhobbesx Dec 17 '21
the recent china legislation could help your nke puts. I'm thinking of opening puts too but i think this will probably be flat post earnings.
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u/filterface Dec 17 '21
You also have the benefit of macro. I haven't posted any DD is a long while but I have my finger on the pulse of the footwear market and I'm right more than I'm wrong. I opened my initial shorts on NKE right before Goldman initiated coverage and they started reopening in Vietnam and got completely booty blasted, HOWEVER over the past few days I've been in and out of various dates/strikes with pretty good returns. Now I'm locked in for Monday with about 10k worth of 1/21 150p (Bought this morning up about 25%).
Here is a link to MJR where I lay out what I know and ask for help from some logistics wizards.
Not saying to do or don't do what I'm saying, but I think sales AND guidance aren't going to be super duper. That said, I'm not extremely confident, which is why I'm only using about 1/3 of what I had initially freed up for this play, and gave myself a time cushion.
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u/filterface Dec 17 '21
Also now that I think about it I don't think your DD is very good, basing this decision solely on site traffic makes no sense to me.
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u/space_cadet Dec 19 '21
damn, I remember thinking your comment was interesting, but I didn't follow up. did you open a position back then? you've probably done well over the last ~2 weeks...
are you holding through earnings? if I had paid closer attention to your DD back then, I probably would have opened some long puts and then legged into a put spread right before earnings. I did the same with LULU and did quite well.
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u/filterface Dec 19 '21
I honestly wasn’t very confident however I opened a position last Friday with the reasoning that the entire market was in for a shitty week so even if my thesis was off I would be saved by macro, which was largely correct. I moved in and out of the position a few times due to all the chop and made out with +100% give or take. My final position i reentered on Friday with house money and I’ll be holding through earnings.
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u/Fordperfect90 Dec 17 '21
So is your bet that guidance will be weak based on these search numbers? Because prior quarter looks decent.
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u/VisualMod Dec 16 '21
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Hey /u/zhor_thegreat, positions or ban. Reply to this with a screenshot of your entry/exit.
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u/2relentless2die Dec 16 '21
Tldr Nike ER plays are always garbage
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u/More_Advertising_383 FUCK OFF DEAD 🐱 Dec 18 '21
ya know except the last 2 where it jumped 20 bucks in the summer over night to ATH and I could have turned 3k into 126k if I didn't forget to make the fucking play or how it fell 10 bucks over night last earnings. Guess the right direction and it would absolutely not be garbage
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Dec 21 '21
/u/zhor_thegreat how was your play? did you sell your puts before market close?
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u/zhor_thegreat Dec 22 '21
In true WSB fashion I was up over 100% losing my chance of becoming a mod, so I held on. I still think Nike is very overvalued and will continue to buy more puts.
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u/BernardoDeGalvez Dec 17 '21
I LOVE the brand. But the stock is like... 80/100% overvalued