The Intrinsic Value Podcast - The Investor’s Podcast Network

TIVP015: Nike (NKE): Nike (NKE): Just Buy It? w/ Daniel Mahncke and Shawn O'Malley

Apr 13, 2025

Dive into the evolution of Nike, from its humble origins to its current struggles with sales and innovation. Discover how the brand's shift to direct-to-consumer strategies has affected its relationships with wholesalers and affected its market standing. Explore the competitive dynamics against emerging brands and the leadership transition to Elliot Hill. Learn about their recent financial challenges and the potential for a comeback as they aim to regain their edge in the athletic wear market.

01:06:57

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Episode notes

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Quick takeaways

Nike's reliance on legacy wholesale relationships has hampered its competitive edge, prompting a need for strategic reevaluation amid growing competition.

The shift towards a Direct-to-Consumer model revealed significant miscalculations about consumer behavior, leading to a decline in wholesale sales and critical partnerships.

Under CEO Elliott Hill's leadership, Nike aims to prioritize innovation and athlete collaborations while addressing inventory issues to regain market relevance.

Deep dives

Nike's Marketing Evolution and Legacy

Nike's unparalleled marketing success is largely attributed to its strategic collaborations with prominent athletes like Michael Jordan, whose partnership revolutionized sports branding. The Air Jordan model not only generated substantial revenue but also transformed athletes into powerful individual brands, thereby reshaping the marketing landscape across sports. However, while Nike built strong brand awareness through these partnerships, it became overly reliant on its legacy in the wholesale market, mistakenly believing its established position would always protect it. This dependency ultimately proved detrimental as the company itself hampered its legacy advantages by reducing relationships with wholesalers, leading to a decreased competitive edge.

Intro

3min

The Origins and Evolution of Nike: A Marketing Powerhouse

5min

The Nike Evolution: From Moonshoe to Market Leader

8min

Leadership Shift at Nike

4min

Shifts in Retail Dynamics: The Battle Between Direct-to-Consumer and Physical Stores

4min

Nike's Market Dynamics and the Impact on Retail Partnerships

4min

Nike vs. Emerging Contenders

19min

Nike's Financial Challenges and Future Prospects

20min

Daniel Mahncke and Shawn O’Malley break down Nike (ticker: NKE), the global leader in athletic footwear and apparel. With a legacy built on innovation, iconic athlete endorsements, and a brand that resonates across generations, Nike has long been a dominant force in the sportswear industry. But after years of consistent success, the company is now navigating through one of its toughest stretches in decades, facing slowing sales, margin pressure, and growing competition from younger, more trendy brands.

In this episode, you’ll learn why Nike’s once-flawless growth story has recently hit turbulence, how its shift toward direct-to-consumer impacted its wholesale relationships, what the brand is doing to win back market share and reignite innovation, why CEO Elliott Hill is refocusing the company on core sports categories, and whether this could be the reset Nike needs to stage a long-term comeback — plus a whole lot more.

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IN THIS EPISODE, YOU’LL LEARN

00:00 - Intro

01:48 - How Nike went from a small retail store to the biggest brand in sportswear.

12:13 - How Nike’s business is structured.

21:46 - Why Nike’s management decisions caused today’s challenges.

25:46 - How the new competitive landscape looks.

31:55 - Whether Nike still has a moat.

37:47 - Why Nike lost the edge on innovation.

38:55 - What Nike’s new CEO is doing to turn the ship around.

46:11 - How do Nike’s most recent results look.

50:39 - How to think about Nike’s intrinsic value.

57:08 - Whether Shawn & Daniel add NKE to The Intrinsic Value Portfolio.

And much, much more!

*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.

BOOKS AND RESOURCES

Get smarter about valuing businesses in just a few minutes each week through our newsletter, The Intrinsic Value Newsletter.
The World Cup 2014 Nike Commercial.
Nike: From Humble Beginnings to Global Domination — We Study Billionaires podcast.
Daniel Mahncke’s last Pitch on Moncler.
Phil Knight's Shoe Dog.
Check out our previous Intrinsic Value breakdowns: AutoZone, Alphabet, Ulta, John Deere, and Madison Square Garden Sports.
Check out the books mentioned in the podcast here.
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