Wall Street Breakfast Podcast: Nike: ‘Comeback Takes Time’

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Nike (NKE) cuts revenue growth forecasts as macro headwinds to have ‘pronounced’ impact. (00:27) Biden, Trump go back and forth over inflation at first U.S. presidential debate. (01:47) Equinor (EQNR) comes up dry in first Argentina offshore well. (03:11)

This is an abridged transcript of the podcast.

Nike shares are down 14% in premarket action after the company earned an adjusted profit of $1.01 per share beating street expectations, but reported that revenue was down 2% versus estimates for a 1% gain.

Nike’s CFO Matthew Friend updated the company’s Fiscal ’25 outlook saying that they are “taking actions to reposition NIKE to be more competitive, and to drive sustainable, profitable long-term growth.”

Nike is faced with the challenge of “navigating macro headwinds that will have a pronounced impact on fiscal 2025” and continued softness in China.

Nike (NYSE:NKE) now expects FY25 sales to be down mid-single-digits with sales in the first half of the year down by high-single-digits. The company initially guided for a low-single-digit decline in sales for 2025. Gross margin in FY25 is expected to expand by 10-30 basis points.

The CFO said, “A comeback takes time.”

Both CEO John Donahoe and Friend acknowledged the lack of innovation which has plagued the company, especially in the most recent fiscal year, as competitors gain traction in both the fitness and running categories.

One of the areas that the company pledged to reinvigorate is its once legendary running division.

The first televised debate between President Joe Biden and former president Donald Trump saw the two sparring over the key topic of inflation.

Trump said that he left Biden with an “unbelievable situation” in terms of the economy when he left office.

Biden shot back by saying that Trump’s administration had botched the handling of the COVID-19 pandemic, which led to the economy cratering.

So we looked at the data from the U.S. Bureau of Labor Statistics.

Total nonfarm payroll employment was at 142.6M in December 2020, at the end of the last full year of Trump’s term. Meanwhile, consumer prices for all items rose 1.4% from 2019 to 2020.

In comparison, total nonfarm payroll employment was 157.2M in December 2023, at the end of the last full year of Biden’s presidency. Consumer prices for all items rose 3.4% from 2022 to 2023, as inflation remains elevated due to the upending of supply chains during the COVID pandemic.

For investors looking to track the elections through market instruments, here are some politically driven Republican and Democrat exchange-traded funds:

• God Bless America ETF (YALL)

• American Conservative Values ETF (ACVF)

• Point Bridge America First ETF (MAGA)

• Democratic Large Cap Core ETF (DEMZ)

• Unusual Whales Subversive Democratic ETF (NANC)

• Unusual Whales Subversive Republican ETF (KRUZ)

Equinor (NYSE:EQNR) said Thursday that its first highly anticipated exploration well drilled in a new frontier basin offshore Argentina showed no indications of oil or natural gas.

S&P Global reported that expectations were running high in the local oil industry, pointing to a potential initial production of 200K bbl/day.

Equinor (EQNR) has a 35% stake, alongside its two partners, Argentina’s state-run YPF (YPF) with 35% and Shell (SHEL) with 30%.

The well was the first to be drilled in the North Argentine Basin.

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Catalyst watch:

Now let’s take a look at the markets as of 6 am. Ahead of the opening bell today, Dow, S&P and Nasdaq futures are in the green. Crude oil is up 1.2% at $82 per barrel. Bitcoin is up 0.2% at $61,000.

In the world markets, the FTSE 100 is up 0.5% and the DAX is up 0.6%.

The biggest movers for the day premarket: Infinera’s (NASDAQ:INFN) stock jumped over 25% after Nokia (NOK) announced it would acquire the firm for $2.3B.

On today’s economic calendar:

• 8:30 Personal Income and Outlays. The headline number — the PCE index — is expected to see no change month-over-month, or 2.6% year-over-year, according to the consensus. That compares with April’s 0.3% M/M increase and 2.7% Y/Y growth.

• 9:45 Chicago PMI

• 12:00 PM Fed’s Michelle Bowman will participate in a discussion at the Ronald Reagan Presidential Foundation and Institute Leadership Council Conference