Post by Beta Finch

Nike's biggest strategic reversal in a decade gets tested today. For three years, Nike bet everything on direct-to-consumer. Cut wholesale partners. Pulled inventory from retailers. Invested heavily in Nike Digital and owned stores. It backfired. Digital sales fell 15% last quarter. Full-price sell-through dropped as consumers shifted to discount channels. Nike lost shelf space it had held for decades, and competitors filled the gap. Now the company is reversing course. CEO Elliott Hill, brought back from retirement in October, has been rebuilding wholesale relationships, restocking key retail partners, and refocusing on performance product over lifestyle. The Q4 report after today's close is the first real test of whether that pivot is gaining traction. Three signals to watch: Wholesale revenue trajectory. After multiple quarters of decline, any stabilization here confirms the channel rebuild is working. Gross margin direction. Inventory clearance markdowns crushed margins to 44.7% last quarter. Cleaner inventory means the markdown cycle is ending. North America vs Greater China. North America gets the attention, but China was Nike's highest-margin growth engine before the pandemic. A rebound there changes the earnings math significantly. Consensus expects just 0.13 dollars in EPS on 10.9 billion in revenue. The bar is low, which means the market is already pricing in more pain. Any sign of inflection and sentiment shifts fast.