Jim Cramer on Nike: “It’s the Old Inventory That I Worry About”

NIKE, Inc. (NYSE:NKE) is one of the stocks on Jim Cramer’s game plan this week. Cramer highlighted what he said about the stock during his club’s call, as he remarked:

“Next up, I like Thursday… After the close is the biggest night of the week when CNBC Investing Club position, Nike reports, and FedEx also issues its quarterly numbers. Now, I told people listening to the club call today that I think it’s still too soon to make a big swing at Nike. I’m not doing that yet because the company was so messed up, much more than we thought before Elliott Hill came in, the new CEO, that was a year ago. But it’s been that tough to turn around. I do like that we have the World Cup next year. A good showcase ahead. But it’s the old inventory that I worry about.”

Photo by Artem Podrez on Pexels

NIKE, Inc. (NYSE:NKE) is an athletic and casual footwear, apparel, equipment, and accessories company that sells its products under brands, including Nike, Jordan, and Converse. It is worth noting that during the October 17 episode, Cramer said that he wants to “be a buyer, not a seller” of the stock. He commented:

“Same deal with Nike. The previous CEO took a good company and turned it into an also-ran… Now that Nike old hand, Elliott Hill has come in, he needs to reinvent the entire business. First, he needs to go back to the old brick-and-mortar distribution network… It means new science and innovation have to be developed, which seems to have been obliterated under the previous regime. Third, he has to fix China, not a quick fix. Oh, and let me just tell you, there’s still inventory within the system, and that holds down earnings. But most importantly, he’s got management and the rank and file rowing in the same direction because he was much loved before he left… This is another stock though that’s been pulling back as analysts realize that the fast turnaround is impossible. Again, they don’t seem to understand that turnarounds do take a lot of time. This is precisely the moment when people want to give up on Starbucks and on Nike, which is why I want to be a buyer, not a seller of both.”

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Disclosure: None. This article is originally published at Insider Monkey.