Nike Q2: The Repricing Might Have Started
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Luca Socci5.91K FollowersFollow5ShareSavePlay(9min)CommentsSummaryNike fell 10% despite beating estimates, showing that investors care less about short-term EPS beats and more about margins, China's weakness, and the lack of a credible turnaround narrative.Revenue held up thanks to wholesale, but the shift came at the cost of profitability, with gross margins down as tariffs and promotions continue to weigh on earnings power.Valuation remains demanding, with investors pricing a sharp earnings rebound driven mostly by cost efficiency, a scenario that looks optimistic given current execution risks. Wirestock/iStock Editorial via Getty Images Nike (NKE) keeps bleeding. In the past three months, it lost almost 12%, even though its Q1 FY26 results topped estimates (which, to be fair, were low). Perhaps investors still remember how Nike performed well during the pandemic, with the stockThis article was written byLuca Socci5.91K FollowersFollowI’m a long-term investor focused on U.S. and European equities, with a dual emphasis on undervalued growth stocks and high-quality dividend growers. Through years of experience, I’ve learned that sustained profitability—evident in strong margins, stable and expanding free cash flow, and high returns on invested capital—is a more reliable driver of returns than valuation alone. I manage one of my portfolios publicly on eToro, where I qualified as a Popular Investor, allowing others to copy my real-time investment decisions. My background spans Economics, Classical Philology, Philosophy and Theology. This interdisciplinary foundation sharpens both my quantitative analysis and my ability to interpret market narratives through a broader, long-term lens. I started investing when I became a father. By managing wisely what I received and earn, I aim to ensure for me and my children that we don't have so much that we don't have to do anything, but that we have enough assets to be free to do what we want. The goal is not to free myself from work, but to make sure I can work in the place and in a way where I can fully express myself.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.