Jim Cramer’s Game Plan for This Week: 8 Stocks in Focus

2. NIKE, Inc. (NYSE:NKE)

Number of Hedge Fund Holders: 75

Cramer stated that NIKE, Inc. (NYSE:NKE) has to introduce more innovation to stay competitive with its rivals.

“After the close, we believe we’re gonna get a revelatory report from Nike. Now, the new CEO Elliott Hill, he’s an old Nike hand by the way, will have to lay out a story about how to reignite this brand globally, which is undersold from Adidas, Hoka, Deckers, Hoka of Deckers, and then On Holdings, which we’ve had on a bunch of times. I think Nike has to do more than just say it’ll work harder with its partners. That’s a hackneyed statement, doesn’t hold any water with me anymore. The company needs to show innovation, dazzling innovation, the kind that makes us feel like fools for even thinking of abandoning Nike. It’s amazing how much damage the previous CEO did to this once unassailable brand. It won’t be undone easily and we’ll need both, a roadmap with a line of sight to the end of the number cuts and a sense of newness.”

NIKE (NYSE:NKE) designs, develops, markets, and sells athletic footwear, apparel, equipment, accessories, and services, including performance gear for various sports activities. It has been facing challenges in managing the right balance between direct-to-consumer sales and its broader sales strategy. Company executives admitted that they overemphasized direct and online sales, which left the brand unprepared for the return of in-store shopping as pandemic lockdowns eased.

As the company reduced sales through large retail partners and redirected inventory to its own channels, it experienced a significant drop in revenue. In fiscal Q1 of 2025, revenue fell by 10% year-over-year, with sales coming in below expectations. In October, Matthew Friend, chief financial officer, acknowledged that the company had made mistakes by focusing too heavily on direct sales and said teams were engaging closely with partners to address these issues.

Additionally, in October, NIKE (NYSE:NKE) replaced its CEO with Elliott Hill, a long-time company veteran. Hill previously ran Nike’s product and marketplace division. The upcoming fiscal Q2 2025 earnings call ought to provide further insights into the new strategic direction under Hill’s leadership.