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Interviewer
Nike reported some numbers, some better than expected numbers. Stocks up almost 5%, although it's still down about 3% year to date. But maybe a little bit of turnaround there. Working through the inventory, as some smart folks have told me about the Nike story. One of those is Poonam Goyle. She's a senior US E Commerce and Retail analyst for Bloomberg Intelligence. Put them Is the turnaround at Nike, is it kind of turning? Is it working?
Poonam Goyle
It's working. I think 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. We wanted to see inventories align with sales. So while the work isn't done and it's not over and it's not a straight line up, we do see momentum building. What they're doing is working. The new products, the innovation, the focus on wholesale, it's all Coming together, there are still some pitfalls. China is still sluggish and we'll need to wait and see what happens there as well as with its Converse brand.
Host
Okay, so China's definitely an issue. Converse is a work in progress. When I look at the revenue line, the top line, what I see is direct revenue fell 4%, wholesale revenue rose 7%. Just break that down for us in terms what that means, direct revenue versus wholesale revenue.
Poonam Goyle
Sure. So direct revenue composes of stores which were actually up 1%. So that shows us that the innovation and the new products which are flowing through their own stores is working. 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. So this channel will be pressured for a couple of quarters. Still wholesale up 7%. A great, great number. I mean, it just shows that coming back into partnerships with Footlocker in a more meaningful way, getting on Amazon.com, all these efforts are paying off and they're where the customer is. They're gaining their shelf space back and the customers are responding favorably.
Interviewer
You know, the Nike brand is such a powerful, powerful brand. I think of it like Coca Cola or Apple. It's so powerful. Yet some of those American brands in China under pressure, and I'm wondering just with the geopolitics, is Nike a brand where that might be feeling some anti American sentiment from consumers?
Poonam Goyle
So that has happened in the past. There have been boycotts against, you know, US American brands. We don't think that's the issue yet from what we're hearing. But 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 they do in the US today. So that's also a work in progress that they need to get through.
Host
Let's talk about profitability. Margins declined due to higher discounts and then also the higher tariffs in North America. I look at gross margin 42.2%. Last year at this time it was more than 45%. Now the 42.2% was better than estimated. How long is it going to take for Nike to turn that around?
Poonam Goyle
I think we have quite some time to get back up to historical margins. In fact, you know, on the call yesterday, they said that they do still aspire to reach double digit EBIT margin. EBIT margins in the quarter that they just reported was only at 7.1%. So that's a long Runway. We don't think it's anytime soon. And the hit from tariffs is building, not reducing. They had expected $1 billion the last time they spoke to us and yesterday that went to $1.5 billion in excess costs from tariffs.
Interviewer
How much are they passing along to the retailer versus taking that in their margin? Because I mean Nike is probably just a great example of how companies are trying to deal with the tariffs.
Poonam Goyle
Yes, I think they're doing this actually very smartly. They're not increasing prices on products that are under a hundred dollars, but they are taking prices up on sneakers that are above that price point. So if you think about moving prices up, it's very easy to say the price of milk went up from $3 to 3.50. But when you're looking at a pair of sneakers, especially a new launch, you have no comparison. So you can go ahead and price up your new innovation and the customer may not even recognize that there was a material price increase and that customer has a little bit more flexibility to stretch their wallets at that price point.
Host
Poonam, if you are heading up on holdings or Adidas or Skechers or you know, any of the hoka, what would you be thinking looking at this set of results?
Poonam Goyle
So Skechers I think is in a different league than Nike. It's, it's a little bit different. It's a value play. And I think they don't compete directly like in Adidas or an AN or a HOKA would with them. Adidas is doing really well on its franchise lifestyle shoes. And I think Nike, what you heard yesterday was doing well in performance. So two still very distinct categories though for AN and hoka. I think it's a little bit of a different story because 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. So, so I would be just, you know, a little concerned and 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 moving forward.
Interviewer
Stay with us. More from Bloomberg Intelligence coming up after this.
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Interviewer
Another IPO priced here. Neptune Flood Insurance NP is the ticker. And joining us from the New York Stock Exchange floors, Trevor Burgess. He's the CEO. Trevor, thanks so much for joining us here. Congratulations on the IPO is priced at $20. I'm looking at the Bloomberg terminal now. We got a bid of 22 and a half and the ask of 22 and 3 quarters. So maybe they'll finally get this thing opened. If I were running your deal Trevor, I would have had this open at 10:30 no later. Trevor, talk to us about your business model flood insurance. You guys have exposure to Florida? Nobody provides insurance in Florida. What's your business model?
Trevor Burgess
Yeah, so Neptune is an artificial intelligence company that does a really good job at underwriting flood risk for global insurance and reinsurance companies. So we don't actually take the risk. We build technology that does a really good job at analyzing that risk and making sure it's something that the global insurance markets want to take on, which makes us the largest competitor to the National Flood Insurance Program, which is the federal government's program, which was the only way to buy flood insurance for a long time until NEPTUNE came along. Happens to be that the government's closed today. So Neptune is the only game in town right now, which is exciting for us, obviously, because we want to help those 1300 consumers who are trying to buy their house today and who need flood insurance. We're the solution.
Host
So, Trevor, let me ask you. There's been a lot of complaints about the federal flood insurance program. What is broken with it? Why is it something that people are not on board with or people can't get when they need?
Trevor Burgess
Well, there are a couple of ways to look at the NFIP's problems, but the biggest one is that they've lost nearly $40 billion in their history. They're paying millions of dollars a day in debt payments to the US Treasury. So it's just an unsustainable program. And it doesn't offer a product that consumers want. They only go up to $250,000 of coverage. On your house, Neptune offers up to $7 million of coverage. We'll also cover your Airbnb or your hotel. If you're flooded out of your room. If you are with the nfip, you're just out of luck. If you have a flooding, there's no money for that hotel.
Interviewer
So who are your clients, Trevor? Are they the insurance companies and reinsurers themselves?
Trevor Burgess
We get to have two clients. We serve those global insurers and reinsurers who are looking to put money to work in the flood insurance space. And importantly, our customer is the American homeowner and business owner. We provide residential and commercial policies to protect your home. We compete with the nfip. Every day that they're open. Today, they happen to be closed.
Host
Fair enough. Fair enough. In terms of which states are most affected Paul mentioned, obviously Florida. But is there. I mean, floods seem to happen. Yes, floods seem to happen to every state, including those are inland. Is there any area in the country that is, you know, more relatively shielded from flood risk?
Trevor Burgess
Not really. If it can rain where you live, then it can flood. And we saw that in the month of July, there were major floods in 23 states in this nation. That means that everyone is really at risk and needs to have flood insurance. But unfortunately, because of the government's program, only 4% of Americans have coverage today. Neptune is trying to change that. We want to get many, many more Americans protected from this most dangerous Peril. You've seen these hurricanes when they hit, the tragic flooding that took place in North Carolina and in Texas recently. Neptune is here to make sure all of those homes are protected.
Interviewer
Trevor is flooding. Is that a risk that is going up in frequency and in damage? And if so, why is that happening?
Trevor Burgess
It's happening. The answer is yes. And it's happening because the climate is changing. It's undeniable that the sea level in Key West Florida is nearly a foot higher than when I was born. The temperature in the Gulf and in the Atlantic is warmer than it was 10 years ago. That added heat is energy and that leads to more frequent and severe storms.
Interviewer
So what's the, what's the growth story for neptune? Is it more markets? Is it more policies? Is it driving rates higher? How are you guys pulling those levers?
Trevor Burgess
The growth story for NEPTUNE is helping educate the American consumer that their homeowners policy does not cover the risk of flooding and that they need to buy a separate policy to protect their most valuable asset. If we can just help educate people on that fact, Neptune is going to do a great job at growing.
Host
We should mention that NEPTUNE is going public after a bunch of specialty insurance companies have gone public this year. Accelerant Holdings, Aspen Insurance, American Integrity Insurance, Slide Insurance. What do you think it is about the current environment that makes it so welcoming for insurance companies to tap the public market?
Trevor Burgess
It's nice to have the market open and it's nice that pricing and insurance make sense. We want to make sure that that consumer is finding value, that the agent is doing well, that Neptune's making money and it's sustainable for the global insurance and reinsurance community. I think we have some good equilibrium in the industry right now and that's why you're seeing so many companies come to market.
Interviewer
Stay with us. More from Bloomberg Intelligence coming up after this.
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Interviewer
Again, we were talking about a lot about I so is everybody in the marketplace really for the last two or three years and and now you've been looking for derivative plays and a lot of the deliberative plays have focused on who's going to power all these data centers and that focuses on energy, fossil fuel energy, new energy, and even including nuclear energy. So everything seems to be on the table as these data center providers think about how they're actually going to power this stuff going forward. Scott Levine joins us. He looks at the energy business for Bloomberg Intelligence. He put together a global team and put out a huge report here and a really good report on nuclear power 2026 outlook. He's saying AI driven power demand set to spark $350 billion build cycle. Scott, thanks so much for joining us here. I love the big round numbers here. Talk to us about from an energy perspective, what the industry is doing to prepare for what seems to be this insatiable demand for power.
Scott Levine
Yeah. So nuclear really has two very big positives going for it. Number one, it's a emissions free power source and the hyperscalers that are really behind the investments care about that deeply. Right. And so they've favored more renewable sources heretofore like wind and solar. But what those lack are 24 by 7 baseload characteristics. And for a data center to be up 24, 7, that's not going to do it. Right. So nuclear checks both of those boxes and those are two very big positives. And the reasons that you're seeing folks like Microsoft and Meta come out in favor of nuclear power and yeah.
Interviewer
So what's the how much does nuclear provide today in the US versus where you think it might be in 25 years?
Scott Levine
Yeah. So today it's a little bit below 20% of the grid.
Interviewer
Okay.
Scott Levine
Which we're saying will return to about in our base case scenario, 20% of the grid by 2050. That may not seem like much, 2 percentage points. Right. But it will equate to or amount to a $350 billion investment to get there. So those are big numbers. And in addition to that we're Talking about adding 60 some odd gigawatts to the grid and you can think about each full size nuke being 1 gigawatt. So that's basically building 60 generating units as our base case. So those are big numbers to get you from 18 to 20% over a 25 year period of time.
Interviewer
I tell you, I went in this report that you and your team put together section five small modular reactors. That's where I wanted to go to because I haven't. We've had some people come into the studio over the last few years and just talk to us about the science and the engineering and the possibilities of these small modular reactors. Tell us what they are and what role they could play going forward.
Scott Levine
Yeah, so really these are. And none of these have been built in the US Yet. Right. So this is very much an emerging technology play. But basically you're talking about is taking a full size nuke, you're driving down the highway, you see a big cooling tower, bunch of smoke coming out the top of it. These are much, much smaller. Right. And so the idea here would be that these are much more flexible. And so if you have more disparate data centers located throughout the country, you can power these extensively with these smaller units. Right. And we're talking about, you know, some of these are smaller versions of what's already in operation today, which is a light water reactor. And then some of these types of units are different types of technologies. You have gas cooled reactors as opposed to water, you have molten salt cooled reactors as opposed to water. And these use different types of technologies, different types of fuels still remain to be licensed and proven. So a lot of it's very much on the conversation, but the technology in each of those areas holds promise. So we'll see. And each of them has pros and cons. Right. And so we'll see over the next five years the technology shakeout and see which ones end up being at the top of the stack for the US but each of them have a lot of money behind them and a lot of support from a lot of deep pocketed players.
Interviewer
Talk to us about this Trump administration. What is its view on nuclear fuel as an option?
Scott Levine
Okay, so firstly, very positive. They came out with a bunch of executive orders in May where they have clear support. They're trying to streamline the licensing process. So these things came. They basically want to see 10 reactors in construction by 2030.
Interviewer
Okay, wow.
Scott Levine
Okay, so yeah, and that's five years from now. It seems like a long time, but in nuclear world where takes 10, even 15 years to build a reactor, which is what it took to build the only reactor that's been built in the US in the last 30 years, took 15 years to build. That is not that long a period of time.
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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
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.
[01:42–02:46]
[02:46–03:43]
[03:43–04:24]
[04:24–05:25]
Pricing Strategy:
[06:00–07:02]
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)
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.