Bloomberg Intelligence Podcast

Episode: Nike’s Comeback Is Taking Shape as Sports Focus Pays Off
Date: October 1, 2025
Hosts: Scarlet Fu and Paul Sweeney
Main Analyst Guest: Poonam Goyle, Senior US E-Commerce & Retail Analyst, Bloomberg Intelligence

Episode Overview

This episode centers on Nike’s latest earnings report and the company’s ongoing turnaround efforts. Scarlet Fu and Paul Sweeney, leveraging insights from Bloomberg Intelligence, speak with Poonam Goyle about inventory normalization, channel dynamics, challenges in China, margin pressures, and competitive positioning. The episode also features segments on the evolving insurance IPO landscape and the energy sector’s response to surging AI-driven data center demands.

Key Discussion Points and Insights

1. Nike’s Turnaround Progress

[01:42–02:46]

• Nike has reported better-than-expected quarterly numbers, with the stock up nearly 5%, despite being down 3% year-to-date.
• Momentum Building:
  Poonam Goyle: “Yesterday was the first sign that Nike is able to pick up momentum. Sales on a reported basis were up 1%. Inventories were down 2%. This is exactly what we wanted to see…momentum building. What they're doing is working.” (02:06)
• Success is attributed to new product launches, renewed wholesale partnerships, and innovation.

2. Channel Performance: Direct vs. Wholesale

[02:46–03:43]

• Direct Revenue:
  • Up 1% in company-owned stores, demonstrating that in-store innovation is effective.
  • Digital sales down 12%, reflecting ongoing inventory clearance.
    Poonam Goyle: “What made the DTC revenue go down 4% was that digital was down 12%. No surprise here. This is where they're clearing all that excess inventory.” (03:01)
• Wholesale Channel:
  • Up 7%, driven by stronger partnerships with retailers like Foot Locker and Amazon.
    Poonam Goyle: “Coming back into partnerships with Footlocker in a more meaningful way, getting on Amazon.com…paying off...they're gaining their shelf space back and the customers are responding favorably.” (03:01)

3. Challenges in China

[03:43–04:24]

• The Chinese market remains sluggish for Nike.
• Analysts do not attribute it to anti-American sentiment currently, but to a need for stronger product offerings and higher levels of excess inventory.
  Poonam Goyle: “There have been boycotts against…US American brands. We don't think that's the issue yet…The issue is more product at Nike in China. They do need to ramp the product and they do have a lot of excess inventory there.” (04:02)

4. Profitability and Margins

[04:24–05:25]

• Gross margin declined to 42.2% (down from 45% last year), albeit better than estimates.
• EBIT margin at 7.1% for the quarter, well below the company’s double-digit target.
• Increased tariffs in North America impacting costs:
  Poonam Goyle: “They had expected $1 billion the last time…yesterday that went to $1.5 billion in excess costs from tariffs.” (04:43)

Pricing Strategy:

• Nike is selective in passing cost increases to customers:
  • No price hikes for products under $100.
  • Premium/sneaker launches see higher prices, with consumers less likely to notice.
    Poonam Goyle: “…especially a new launch, you have no comparison. So you can…price up your new innovation and the customer may not even recognize that there was a material price increase…” (05:25)

5. Competitive Landscape and Implications

[06:00–07:02]

• Skechers seen as a value play, not a direct competitor in Nike’s core performance segment.
• Adidas is thriving with lifestyle franchises, while Nike is focused on performance, especially running.
• Nike is regaining momentum in running, a category where On and HOKA recently gained share. Poonam Goyle: “Running was back on. It's doing phenomenally well. And that is where HOKA and On both took share from Nike. So…just make sure that I keep my game on when it comes to innovation because at the end of the day, product is what's going to drive how sales momentum will go…” (06:13)

Notable Quotes & Memorable Moments

• On Turnaround Signs:
  Poonam Goyle: “It’s not over, and it’s not a straight line up, but we do see momentum building.” (02:06)

• On Channel Strategy:
  Poonam Goyle: “Wholesale up 7%. A great, great number…they’re gaining their shelf space back and the customers are responding favorably.” (03:01)

• On China:
  Poonam Goyle: “We do think that the issue is more product at Nike in China. So they do need to ramp the product and they do have a lot of excess inventory there, more so than…in the US today.” (04:02)

• On Tariffs:
  Poonam Goyle: “The hit from tariffs is building, not reducing.” (04:43)

• On Competition:
  Poonam Goyle: “What I heard from that call yesterday was that running was back on. It's doing phenomenally well. And that is where HOKA and On both took share from Nike.” (06:13)

Timestamps for Important Segments

• [01:42] – Nike’s quarter and turnaround, featuring Poonam Goyle
• [02:06] – Inventory and sales momentum; initial signs of comeback
• [03:01] – Channel breakdown: direct vs. wholesale and implications
• [04:02] – China’s sluggish performance: root causes
• [04:43] – Margin discussion: tariffs, pricing power, and timeline
• [05:25] – Nike's price strategy: premium vs. value products
• [06:13] – Competitor outlook: impacts on Adidas, HOKA, On, and Skechers

Episode Tone and Final Thoughts

The discussion is analytical yet optimistic regarding Nike’s ability to execute a disciplined turnaround. There is clear respect for Nike’s brand strength but a realistic acknowledgment of ongoing risks, especially in international markets and with margin recovery. Poonam Goyle stresses the primacy of product and innovation, with competition heating up, particularly in the high-performance/running segment.

This summary covers all Nike-related content from the episode, omitting ads, non-content sections, and unrelated interviews.