Nagel: This is likely the last bad report for Nike, a clearing event

Tough quarter. I think everybody can agree with that. Shares down double digits, but you didn't change your rating. You still have it outperform. You didn't change your price target. Still at 1:20 where the rest of the streets at about 1:10. What are you seeing in the stock? What upside are you seeing that other people aren't seeing? Yeah, let me look, I want to be clear. I mean, I recently upgraded night. You know, I I've been on the sidelines for a while, just recently upgraded. I upgraded this report. So, you know, as I look at last night's report, I mean, what? It's messy, it's weak, right? But I think there's a silver lining here. I think this is what I've been telling our clients. I think this is the last bad report. This is a clearing event. You know, Nike's had its issues. But I think the biggest positive here, you know, when I was talking a lot, I was talking with management last night, they get it. They, they, they need, they, they're repositioning this company. And I think the you know behind all this noise behind the miss like you highlighted, you know in the fourth quarter of the guy down fiscal 25, what we are seeing is that we're Nike is putting in new innovation, the new products, those products are selling well. So that gives me confidence. You know, that is we look over the next several quarters, couple of years, we will see an improving trajectory at Nike. And now you're getting the stock on sale. So you're you're the person that has a lot of confidence in their innovation pipeline because we spoke to an investor yesterday. They had some questions. A lot of your peers in the analyst community, they have questions about that innovation pipeline. UBS out with the notes saying it takes about 18 to 24 months to get a new product online, but you're saying you have a lot of confidence. You know who else was talking to Nike management or Sara Eisen some big issues here. I'm just looking at the things that she heard from them. The lifestyle business decline. I believe that includes Jordan and things like Air Force Ones, even though they're technically basketball shoes, digital weakness from their direct to consumer business due to that higher share of lifestyle. And then traffic in China decline beginning in April based on macro. How big of a deal is the China part? Why don't we finish on the last one or start on the last one? Well, look, China's important really for two reasons. I mean, one, you know, fundamentally that, you know, it's a, it's a relatively decent sized business now for Nike. So when you have slower growth in China, that weighs upon total companies also. That's where the fundamental argument, you know, for me, when I think about China, I think the bigger implication for Nike is the valuation would stop the stock trades. Because anyone looking at Nike, you know, from especially from a longer term perspective thinks the longer term growth trajectory of this business will be dictated more and more by China, you know, and the, you know, Nike's still relatively small size in that, in that very large market. So China's important, OK. They, they called out China again, as the, you know, is weaker than they want it to be. That's one of the China's, one of the reasons they lowered further guidance for 25. But again, as I look out, OK, I, I still have a lot of confidence in the Nike brand within China. All right, you're seeing it long term. I want to talk about more short term. So one of the things that management mentions is that the NBA Finals, which honestly, they weren't great. It just went by so fast. But it was Jason Tatum against Luka Doncic. Both of them are Jordan athletes. They were really high on that, but I don't remember anybody talking about, I'm a huge NBA fan. I don't think anybody was talking about the Jordan brand with the Finals. Is that a read into the Olympics? A lot of people think the Olympics might be a boost for the company. The fact that Jordan and Nike didn't really come up during the Finals. Is that a read to that to the Olympics? I don't know. I, you know, look, I think one thing Nike does very, very well, even through these more difficult times with the companies is branding. You know, and I know they're excited about the Olympics. They they typically use the Olympics as a big branding event. I think, I think I personally think the Paris games this year will be a, you know, an opportunity for Nike to introduce new, new products. I think it should be an opportunity for Nike to kind of reestablish this brand. So I think that's a pause. Is it a clear is that, you know, an all out positive? No, I mean, it's a, you know, it's a step forward for Nike. You know, I think that I think that I do think that's a positive, right? Frankly, I think the NBA is a positive too.