What to know about Nike's road ahead in China

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shares of nike tumbling more than ten percent today that's following earnings falling to its lowest level in more than six months now this adds to its years of underperformance the stock is down eight percent over ten years compare that to the S and P five hundred which is up

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more than two hundred and forty percent for a closer look at the companies problems highlighted in its latest report let's bring in gabrielle fan rouge right here on set

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i mean it wasn't so terrible north america is certainly showing signs of a turn around here but china china seems to be the issue and what i found particularly interesting here is it's coming in a week where president XI and china is basically saying he is going to double down

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on the consumption part of the economy there so is this nike specifically or is this more of a reflection of china

Gabrielle Fonrouge (Retail Reporter) 00:41.430

you know it's a little bit of both but i would say it's definitely more nike it's interesting because i talked to all of the CEO 's and the athletic apparel and running space right just a few months ago i spoke with martin hoffman he's the CEO of on running and he said china is

Gabrielle Fonrouge (Retail Reporter) 00:54.230

on fire for them the china consumer is strong they're doing very well so that tells me this is very much a nike issue and what elliot hill said on the call last night is that this is a region that they have not been investing in which is is a mishap right because this is one of

Gabrielle Fonrouge (Retail Reporter) 01:08.030

their most important regions they have cut staff they haven't been investing in the stores and for the chinese consumer that store experience is incredibly important they don't like to go to a department store this is what they call a mono brand environment you need to have

Gabrielle Fonrouge (Retail Reporter) 01:20.830

awesome stores in shanghai and beijing you need to have a great website experience if not they're going to go to the zillion other competitors that are there all of nikes competitors are here and they're also in china

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in a way this seems like good news to me for for people who at least believe somewhat in the possibility of a nike turn around because i mean north america actually pretty strong inventories didn't look so bad there's the discounting issue but if you put all that together and

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maybe with a CEO who seems to know what the problem is does it make total sense that it's down below where it was right before the trump tariff announcement

Gabrielle Fonrouge (Retail Reporter) 01:55.670

i mean you know they've been they've really been punishing nike on wall street right because a couple of quarters ago we had the CEO say that this is kind of the the worst of the pain is behind us right there was a big move in the stock investors really thought OK it's all

Gabrielle Fonrouge (Retail Reporter) 02:08.190

upside from here but then what they said last quarter is that progress is not going to be linear and that's what they said again this quarter but i agree with you if that's your biggest problem that you need to fix your stores and invest a little bit more in a region nike is

Gabrielle Fonrouge (Retail Reporter) 02:19.150

very well suited for a turnaround there they have all of the budget they have the scale they have the ability to do that you know what they said last night is elliot he said he's going to focus on retail fundamentals those are the building blocks if anybody can do that nike can

Gabrielle Fonrouge (Retail Reporter) 02:31.830

well

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see if investors believe gabrielle

Gabrielle Fonrouge (Retail Reporter) 02:34.350

thank you thank you