TIVP015: Nike (NKE): Just Buy It? w/ Daniel Mahncke and Shawn O'Malley

The Intrinsic Value Podcast - The Investor’s Podcast Network

The Investor's Podcast Network

Investing, Education, Business

4.6 • 593 Ratings

🗓️ 13 April 2025

⏱️ 67 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Daniel Mahncke and Shawn O’Malley break down Nike (ticker: NKE), the global leader in athletic footwear and apparel. With a legacy built on innovation, iconic athlete endorsements, and a brand that resonates across generations, Nike has long been a dominant force in the sportswear industry. But after years of consistent success, the company is now navigating through one of its toughest stretches in decades, facing slowing sales, margin pressure, and growing competition from younger, more trendy brands. In this episode, you’ll learn why Nike’s once-flawless growth story has recently hit turbulence, how its shift toward direct-to-consumer impacted its wholesale relationships, what the brand is doing to win back market share and reignite innovation, why CEO Elliott Hill is refocusing the company on core sports categories, and whether this could be the reset Nike needs to stage a long-term comeback — plus a whole lot more. Prefer to watch? Click here to watch this episode on YouTube. IN THIS EPISODE, YOU’LL LEARN 00:00 - Intro 01:48 - How Nike went from a small retail store to the biggest brand in sportswear. 12:13 - How Nike’s business is structured. 21:46 - Why Nike’s management decisions caused today’s challenges. 25:46 - How the new competitive landscape looks. 31:55 - Whether Nike still has a moat. 37:47 - Why Nike lost the edge on innovation. 38:55 - What Nike’s new CEO is doing to turn the ship around. 46:11 - How do Nike’s most recent results look. 50:39 - How to think about Nike’s intrinsic value. 57:08 - Whether Shawn & Daniel add NKE to The Intrinsic Value Portfolio. And much, much more! *Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences. BOOKS AND RESOURCES Get smarter about valuing businesses in just a few minutes each week through our newsletter, The Intrinsic Value Newsletter. The World Cup 2014 Nike Commercial. Nike: From Humble Beginnings to Global Domination — We Study Billionaires podcast. Daniel Mahncke’s last Pitch on Moncler. Phil Knight's Shoe Dog. Check out our previous Intrinsic Value breakdowns: AutoZone, Alphabet, Ulta, John Deere, and Madison Square Garden Sports. Check out the books mentioned in the podcast here. Enjoy ad-free episodes when you subscribe to our Premium Feed. NEW TO THE SHOW? Follow our official social media accounts: X (Twitter) | LinkedIn | Instagram | Facebook | TikTok. Browse through all our episodes (complete with transcripts) here. Try Shawn's favorite tool for picking stock winners and managing our portfolios: TIP Finance. Enjoy exclusive perks from our favorite Apps and Services. Learn how to better start, manage, and grow your business with the best business podcasts. SPONSORS Support our free podcast by supporting our sponsors: CFI Education TurboTax Airbnb Connect with Shawn: Twitter | LinkedIn | Email Connect with Daniel: Twitter | LinkedIn | Email HELP US OUT! Help us reach new listeners by leaving us a rating and review on Spotify! It takes less than 30 seconds and really helps our show grow, which allows us to bring on even better guests for you all! Thank you – we really appreciate it! Learn more about your ad choices. Visit megaphone.fm/adchoices Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm

Transcript

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0:00.0	Nike's mode is based on its marketing success through collaborations with the biggest sports
0:06.4	athletes in the world, for example Michael Jordan, but the resulting brand awareness wasn't
0:11.7	its only mode.
0:13.2	As mentioned, Nike's wholesale dominance was crucial as well.
0:17.7	But perhaps that's not an actual mode. it's more of a legacy position that kept working
0:24.6	because wholesalers had no incentive to cut the relationship.
0:28.6	Unfortunately for Nike, they underestimated their own legacy advantage and they cut it themselves.
0:35.6	Perhaps without having the most innovative products, the actual brand value of Nike
0:40.9	is less important than one would have thought.
0:49.0	Hey guys, before we get into today's episode, I have a quick disclaimer.
0:54.2	Our discussion was recorded shortly before the US announced its latest round of tariffs.
1:00.5	One country particularly affected is Vietnam, where Nike now produces 50% of its footwear and 28% of its apparel,
1:08.9	following a major shift away from Chinese manufacturing in recent years.
1:13.6	As I record this, there are already talks about potentially reversing the tariffs.
1:18.3	So by the time you're listening to this, they may already be a thing of the past.
1:22.8	But it's worth noting that if these tariffs persist, they could put additional pressure on Nike's margins
1:28.8	and affect sales if higher prices are passed on to consumers.
1:33.7	Either way, today's episode remains highly relevant, and as always, you can download our
1:39.0	evaluation model and adjust the assumptions based on your own view.
1:43.9	With that said, let's jump straight into today's episode.
1:47.8	Hey guys.
1:49.0	Today, my co-host, Daniel Manka, is back with another company pitch for our intrinsic value portfolio,
	...

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