Bloomberg Intelligence Podcast

Episode: Nike Sinks After China Sales Plunge, Delaying Turnaround
Date: December 19, 2025
Hosts: Scarlet Fu and Paul Sweeney
Key Guests: Poonam Goyal (Senior U.S. eCommerce and Retail Analyst), Lee Klaskow (Senior Transport Logistics and Shipping Analyst), Brian Nagger (Senior Gaming and Lodging Analyst), Mandeep Singh (Senior Tech Analyst)

Episode Overview

This episode centers on the financial and strategic struggles of Nike as its stock drops sharply following another quarter of plunging China sales, raising major questions about the timing and execution of its turnaround plan. The episode also touches on developments with FedEx, the cruise industry, casinos (especially in Las Vegas and Macau), and the high-profile TikTok-Oracle joint venture, drawing on in-depth research and data from Bloomberg Intelligence analysts.

Key Discussion Points & Insights

1. Nike's Turnaround Hindered by China Sales Slump

(02:15–07:22)

• Nike down 9.5% in today’s market session due to the latest earnings revealing deepening troubles in China.

• U.S. turnaround showing progress:

  • Nike’s new CEO, Elliot Hill, has been in the role for about a year.
  • U.S. momentum rebuilding; signs of success in the domestic playbook.
  • China remains the significant drag, not likely to turn before 2027.

    “It may be a 2027 story to see any resurgence in China, if that.” — Poonam Goyal, 03:02

• What’s the issue in China?

  • Brand perception problem — Nike has been overexposed to discounting and off-price channels, eroding its prestige.
  • Chinese consumers see the brand as less premium, while competitors like Lululemon thrive.
  • Solution: Reduce discounting, clear outdated inventory, restore “brand heat”.

    “Nike really just needs to get its stuff together when it comes to product branding and marketing in that region.” — Poonam Goyal, 03:35

• Strategic playbook going forward:

  • Direct regional reporting to CEO for accountability.
  • Inventory clean-up and sharp reduction in off-price/discounting.
  • Emphasis on execution of classic retail fundamentals (“Retail Playbook 101”).

• Converse brand less of a focus:

  • Represents <10% of revenue; struggling, but China is a much larger priority.

• Performance vs. Lifestyle:

  • Nike’s core strength is performance.
  • Goal is to have innovation in performance “spill over” into lifestyle usage, driving both segments.
  • Example: Performance shoes becoming streetwear staples.

• Tariffs and margin pressure:

  • Most footwear/apparel made in Vietnam (20% tariff).
  • Over half of Nike’s recent gross margin compression is tariff-related.
  • Selective price increases and ongoing mitigation efforts expected in 2026.

2. FedEx: Earnings Strength and Headwinds

(11:55–18:03)

• FedEx reported Q2 performance:
  • Strong results, mid-to-high single-digit peak season volume growth.
  • Underlying headwinds: $600 million drag expected in the second half due to:
    • Higher compensation costs,
    • Weak “less-than-truckload” (LTL) segment,
    • Grounding of MD11 aircraft fleet following a recent crash.

  “In their second half they’re going to be having a lot of headwinds… higher variable compensation expenses... less than truckload market... grounding of their MD11 fleet… about a $600 million headwind.” — Lee Klaskow, 12:35

• Industry outlook:
  • ISM Manufacturing Index signals continued weak LTL demand (industrial contraction).
  • Most headwinds are temporary except for structural weakness in LTL.
• FedEx’s business structure:
  • Plans to spin off its LTL (FedEx Freight) division in June next year, aiming for better valuation; LTL business is consolidated and valued at higher multiples.

  “They’re planning on spinning that out in June of next year.” — Lee Klaskow, 15:19

• FedEx vs. UPS:
  • Both are restructuring for e-commerce growth.
  • UPS spun off its LTL business earlier; FedEx still in process.
  • Both focused on SMB customers over less profitable bulk shippers.

3. Carnival & the Cruise Industry

(22:36–28:43)

• Carnival’s Q4 earnings and outlook:
  • Yield growth (+2.5% next year), cost control, and limited supply growth suggest stability.
  • Concern: Industry supply growth (mainly competitors) could pressure pricing, especially in the Caribbean.

  “Going to next year, they are expecting to see about 2.5% revenue yield growth... that's encouraging because there were some concerns…” — Brian Nagger, 23:22

• Converting first-time cruisers:
  • Key driver of North American growth, but penetration still well below other vacation types.
  • Loyalty programs remain important for repeated bookings.
• K-shaped economy and cruise demand:
  • Yields more resilient than hotels in downturns.
  • Leisure (vs. business) travel holding up; supply growth (~1% in 2026 for Carnival) keeps balance.
• Operator comparisons:
  • Viking (luxury sector) +64% YTD,
  • Carnival +23%,
  • Norwegian -11%,
  • Royal Caribbean +30%.
  • Viking’s luxury niche and Carnival’s efficient capital return strategy both cited as success factors.
• Las Vegas & Macau outlook:
  • Vegas: Modest end-of-year growth, but mid-market segment is weak, luxury faring better.
  • Macau: Strong recovery, particularly in “mass business”; different from Vegas but interconnected trends.

4. TikTok U.S. Sale/Joint Venture with Oracle

(33:01–38:20)

• Oracle-led consortium to acquire TikTok U.S., forming JV with ByteDance:
  • Main U.S. concern was algorithm control and data security.
  • Oracle seen as the natural fit to lead JV; deal has U.S. government support, awaiting China’s okay.

  “The main point of contention was the algorithm... there is a decoupling of that versus the app... this should be palatable to both the US and the Chinese government.” — Mandeep Singh, 33:32

• TikTok’s competitive position:
  • Losing ground: Instagram Reels now at a $50B revenue run-rate, YouTube Shorts catching up in engagement.
  • TikTok’s growth, user engagement, and US revenue ($12–15B) have slowed.

  “Instagram reels... have surpassed $50 billion in run rate. That would have been unimaginable...” — Mandeep Singh, 35:02

• Meta (Facebook) and algorithm power:
  • Meta’s AI-powered ad stack outpaces TikTok, driving Reels revenue.
  • TikTok must rebuild its core algorithm and ad system under new JV; expect a lag in business improvement.
• IPO potential:
  • Too early; technical and talent-related integration needed first.
  • Oracle’s focus is still on building its cloud, not TikTok’s direct revival.

Notable Quotes & Memorable Moments

• On Nike’s China problem:

  “So unlike in the US the Nike brand isn't perceived as a higher athletic brand. In fact, it sold way too much and off price and at discount.”
  — Poonam Goyal, 03:35

• On retail execution:

  “It's Retail Playbook 101. They just need to execute. So execution is huge here.”
  — Poonam Goyal, 04:24

• On FedEx's restructuring:

  “They’re planning on spinning [LTL] out in June of next year… So, you know, it'll be pretty interesting to see how that company operates as a standalone provider.”
  — Lee Klaskow, 15:19

• On cruise industry resilience:

  “The leisure consumer travel has been really resilient… Historically, passenger growth has kept up with supply.”
  — Brian Nagger, 24:51

• On TikTok’s lost advantage:

  “If you look at the run rate of Instagram reels, they have surpassed $50 billion… That would have been unimaginable given the kind of lead TikTok had.”
  — Mandeep Singh, 35:02

Important Segment Timestamps

• Nike Turnaround & China sales: 02:15–07:22
• FedEx earnings & structure: 11:55–18:03
• Cruise industry analysis: 22:36–28:43
• TikTok-Oracle JV explained: 33:01–38:20

Tone & Style

The hosts and guests deliver data-driven, jargon-light analysis, mixing insightful commentary with direct, sometimes wry observations about industry realities and company challenges.

Summary Takeaways

• Nike’s recovery is stalling internationally, with China as the critical and most challenging market; restoring brand equity there will require years and disciplined execution.
• FedEx faces short-term earnings headwinds but is restructuring for an e-commerce future, with a significant corporate spin-off on the horizon.
• Cruise industry yields look stable for Carnival despite industry capacity growth, with luxury travel outperforming mass offerings.
• TikTok’s U.S. restructuring is a win for regulators but leaves its competitiveness in question as Instagram and YouTube outpace its growth—major operational rebuilding lies ahead.

This summary provides a comprehensive view of the episode’s discussions and insights, capturing the essence of Bloomberg Intelligence’s real-time, expert business analysis.