Brew Markets – Episode Summary

Podcast: Brew Markets
Host: Ann Berry
Episode: Can Nike Complete a Turnaround? & Gold Hits Another Record-High
Date: October 1, 2025

Overview

In this episode, Ann Berry and her producer John discuss Nike’s ambitious turnaround strategy under CEO Elliot Hill, analyze the ongoing US government shutdown’s impact on the markets, and explain how individual investors can approach gold—especially as it hits another historic record-high. The show weaves stock stories, earnings insights, and listener questions together with actionable takeaways for today’s investors.

Key Discussion Points and Insights

1. US Government Shutdown and Market Impact

(00:32 – 03:58)

• Details: As of recording, a government shutdown is underway after Congress failed to pass a funding bill, leading to approximately 750,000 federal employees being furloughed.
  • "With an estimated 750,000 federal employees now furloughed deemed 'non-essential', one consequence is that key economic data will likely not be published with their regular cadence." — Ann Berry (01:32)
• Market Reaction: Despite the shutdown, markets have only "nudged upwards." This could shift if the shutdown drags on.
• Sector Impact: Airlines and hospitality may see operational disruptions (e.g., 2018 shutdown led to air traffic controller shortages and flight delays).
  • "It is not business as usual for these sectors." — Ann Berry (02:45)
• Key Risk: Delay of economic indicators (employment, inflation) could impact Fed decisions on rate cuts.
• Tariffs: Federal collection of tariffs proceeds as normal.

2. Nike Turnaround: CEO Elliot Hill’s First-Year Report Card

(04:20 – 13:25)

Background

• Nike’s Position: Despite its iconic status, Nike’s share price dropped over 40% in five years due to lost category share, especially in running.
• Leadership: Elliot Hill, returning executive after a 32-year tenure and brief retirement, stepped in as CEO one year ago.

WIN Strategy & Early Results

• Core Strategy ("WIN"):
  • Brand rejuvenation
  • Clearing old inventory
  • Renewing wholesale partnerships (notably resuming sales on Amazon)
• KPIs (last earnings):
  • Wholesale revenue up 7% (to almost $7B)
  • Overall revenue up 1% ($11.7B)
  • Gross profit down 6% (tariff impacts, old inventory clearance)
  • 23rd consecutive year of increased dividend
  • Stock price up 13% in 6 months; 5% in one day post-earnings

Retail Experience Overhaul – The “Sport Offense”

• Key Innovation:

  • Reorganized stores to showcase products by sport rather than by brand, aiming to enhance consumer clarity and boost athlete-focused sales.
  • "The idea is how you walk into a store and actually you see everything organized on the shoe side by sport... it's a pretty differentiated way of starting to reorganize a company as big as Nike." — Ann Berry (07:42)
  • CEO Quote:
    • "In the marketplace, organizing by sport gives us a much clearer point of view... The refresh has already led to double digit revenue increases." — Elliot Hill, Nike CEO (08:40)

• Consumer Perspective:

  • John recounts a store visit: "But it didn't feel like it was a place for athletes... this reorientation is good for athletes who just want some equipment." (09:07)

Product and Collaboration Moves

• Nike x Skims Collaboration:
  • Designed to help Nike better compete for women’s athleisure against Lululemon and Alo.
  • "Nike Skims is more about trying to resonate with women specifically... it's a clever collaboration." — Ann Berry (11:00)
  • Leveraging celebrity influence (Serena Williams featured in launch).

Challenges and Critique

• China and Digital Sales:
  • China revenue and direct-to-consumer digital sales are down.
  • "We actually saw Digital revenues down 12% year over year in their earnings report." — Ann Berry (13:25)
• Wholesale vs. Direct:
  • Return to wholesale means more shoes available on third-party sites (Amazon, Dick’s, Foot Locker), stepping back from previous digital-only push.

Report Card & Final Assessment

• Grades:
  • Ann Berry: A (with a "teeny tiny plus")
    • "It is very difficult to be at a company for 32 years... and actually come back with fresh perspective... I give him some credit for trying something new." (14:18)
  • John: A (as a consumer and by numbers)
    • "As someone who grew up wearing Nikes, I'm into this new experience." (14:08)

3. Listener Q&A: How Can I Invest in Gold?

(16:02 – 19:28)

• Context: Gold hit a new record-high of just under $3,900/oz, driven by global uncertainty, tariffs, sticky inflation, and the US government shutdown.

  • "I don't know if it's the safest asset out there, but it's certainly a, quote, safe haven asset." — Ann Berry (16:18)

• Ways to Invest in Gold:

  • Physical Gold: Coins, bars, jewelry. Requires secure storage; beware of scams.
    • "Getting the precious metal in hand should only be pursued with an abundance of caution, as scams relating to grade and authenticity do happen." — Ann Berry (16:57)
  • Gold ETFs: E.g., SPDR Gold Shares (GLD). Tracks spot price, easy to trade, avoids physical handling.
    • Quote: "If you take a look at the collective assets globally of those kinds of vehicles, we're at $350 billion US so they have grown to an enormous amount." — John Chompalia, Sprott Asset Management (17:59)
  • Tax Note: Gold ETFs may be taxed as collectibles in some jurisdictions (higher cap gains).
  • Mining Stocks/Futures & Options: Indirect exposure, but with higher risk and complexity.

• Advice for Beginners:

  • Multiple ways to invest; none is inherently “safest.”
  • "If you're starting out investing, you can consider these many options while keeping in mind that gold isn't necessarily the safest option." — John (19:28)

4. Market Wrap: Key Headlines

(19:58 – 20:52)

• S&P 500 closes at another record high (+0.33%), Dow up (+0.1%), Nasdaq up (+0.5%).
• Reddit: Shares fell up to 10% as ChatGPT sources less content from the site; potential hit to engagement and monetization.
• Peloton: Shares fell 7% after announcing higher prices, new commercial gym equipment, and AI-enabled software—turnaround not yet convincing investors.
• Intel: (Late-breaking news) May be in talks with AMD to produce chips in its foundries, possibly a catalyst for long-awaited client volume.

Notable Quotes & Memorable Moments

• On Nike’s renewed focus:
  • "Consumers who are clear are less likely to be disappointed when it comes to their experience." — Ann Berry (09:33)
• On Women’s Athleisure Collaboration:
  • "Nike collaborating with a trusted apparel brand like Skims is a clever way to get people to go and adopt or re-embracing Nike in the world of women's apparel." — Ann Berry (11:00)
• On giving a CEO an 'A+' after 32 years at the company:
  • "I kind of like the fact that he's come back... he's not doing the same old. He's kind of going back to basics, but I give him some credit for trying something new." — Ann Berry (14:18)
• On gold’s practicality:
  • "It’s tangible, but you’ll need secure storage. And insurance premiums can sometimes make it even more expensive to hold it than to pay the market price." — Ann Berry (16:40)
• On ETF popularity:
  • "Most popular way for investors to gain access to gold in their portfolios have been through exchange traded listings... it's an easy way for investors to obviously trade gold intraday." — John Chompalia (17:59)

Timestamps for Important Segments

• 00:32 Government shutdown analysis
• 04:20 Nike: Turnaround story, CEO’s first year
• 07:42 Store reorganization and Hill’s “Sport offense”
• 11:00 Nike x Skims & women’s athleisure strategy
• 13:25 Digital DTC and China headwinds
• 14:08 – 14:18 CEO report card / leadership assessment
• 16:04 Listener question: How to buy gold
• 17:59 Expert perspective on gold ETFs
• 19:58 Market wrap: Major headlines, Reddit, Peloton, Intel

Takeaways for Investors

• Nike’s turnaround is showing promise thanks to a wholesale reboot, retail experience overhaul, and smart partnerships, though China and digital are weak spots for now.
• Gold remains a classic safe haven, but investors should consider storage, taxes, and the mechanics of mining stocks or ETFs before jumping in.
• Market reactions to government events (like shutdowns) can be muted at first, but prolonged uncertainty may change the outlook for specific sectors.