'Fast Money' traders react to Nike earnings

Melissa Lee (Anchor) 00:00.430

thank you sarah eisen from the new york stock exchange on nike tonight tim are we in the middle of the turn around here do you see enough proof are you convinced i i

Tim Seymour (Founder and Chief Investment Officer) 00:08.230

think we are i think if you're building a position in nike this is a place to add there's nothing i heard today that made me concerned about some of the legacy problems the positives are two consecutive quarters of revenue growth north america up eight point eight percent it's

Tim Seymour (Founder and Chief Investment Officer) 00:21.390

actually a second derivative margin improvement they're still down but they're improving and i think this is part of the story i think working through the wholesale excuse me working through the inventory problems are important the biggest issue with nike right now is it's not

Tim Seymour (Founder and Chief Investment Officer) 00:33.470

cheap it's twenty five times with peers that are probably fifteen to eighteen times and at a time when i think people are a little bit concerned about their segment so if you're building a long-term nike position you're buying this weakness these numbers were fine yeah i mean

Dan Nathan (Principal) 00:47.470

you got to look at that margin commercial though down three hundred basis points i mean that's not anything right and if you think about one of the reasons or two of the reasons it's obviously tariffs and it's also discounting and you know just take a flash of what's going on

Dan Nathan (Principal) 00:58.430

right now i mean that's not a great place to be especially if you're not considerable if you are concerned about a consumer and you're not sure about how long this tariff pressure and then direct to consumer i mean down nine percent that's not great i mean this is a company that

Dan Nathan (Principal) 01:11.350

actually has had a bunch of iterations where they've tried to do this you know i know wholesale was up but the direct to consumer i'm looking at was down nine percent year over year

Steve Grasso (Director of Institutional Sales) 01:19.790

i think the win now doesn't really have a real strategy now i think they need the lulu moment where they have another new CEO there's the CEO has been there forever how long is how long has he been that year

Melissa Lee (Anchor) 01:30.030

the

Steve Grasso (Director of Institutional Sales) 01:30.350

elliott hill yeah no he's

Melissa Lee (Anchor) 01:31.870

been here forever but how long has he been with michael for oh at nike private four years ago

Tim Seymour (Founder and Chief Investment Officer) 01:35.350

OK yeah

Steve Grasso (Director of Institutional Sales) 01:36.070

so you so you had donahoe who was there for ten years or or so maybe maybe a little bit less than you have elliott hill who they dragged sort of back in i think you need new blood i think you need to have that moment where we need a an epiphany we need something that's going to

Steve Grasso (Director of Institutional Sales) 01:51.870

happen that changes the whole speed you're not getting it with a legacy person inside nike and you have hoka taking chair you have on taking chair they're not taking share in the NFL they're not taking share in pro sports but they're taking share walking around the streets too

Steve Grasso (Director of Institutional Sales) 02:06.750

many private competitors i think you could have an event where it can rally off the bottom china is still slipping north america may be stabilizing but not out of the woods yet it it

Melissa Lee (Anchor) 02:16.350

is a very large company and if you want to get anything new you don't just three D print it and put it on the market i mean there is a pipeline process and we are seeing some green sarah mentioned the bone marrow eighteen which is very shown well and that is part of the

Melissa Lee (Anchor) 02:28.350

innovation that nike that elliot hill has promised there's also the pegasus line that apparently is doing well too so i mean there are signs that there is innovation which is what nike really needed

Karen Finerman (Co-Founder and CEO) 02:41.710

so i'm not concerned to dance but i disagree a little i generally i disagree with dan on a lot but just right here on the minor point of DTC this is a concerted effort change the mix of DTC to wholesale however though nike the call just started at five they have had calls there

Karen Finerman (Co-Founder and CEO) 02:58.270

are eventful so it is absolutely worth listening they've dropped some bombs and some good things so we kind of got to wait to see what they say