Nike Inc.

Overview Key strengths Key risks Strong geographic and channel diversity. Concentrated in a single brand that accounts for roughly 85% of its total revenue. Strong product innovation and growing direct-to-consumer (DTC) segment support above-average margins. Substantial control exercised by the Knight family. A change in ownership could alter the company's strategic direction and financial policies. Robust free operating cash flow (FOCF) generation. Geopolitical and macroeconomic risks can dampen consumer confidence and reduce demand. Consistently low S&P Global Ratings-adjusted leverage of less than 1x. COVID-19-related supply chain disruptions. This, combined with elevated freight, logistics costs and inflationary headwinds, will result in margin compression in 2023, though we expect its credit metrics will likely remain in line for the rating. Nike?s inventory

...Supply chain disruptions have led to excess inventory levels, primarily in apparel that will largely be sold at a discount. This, combined with elevated freight, logistics costs and inflationary headwinds, will result in margin compression in 2023, though we expect its credit metrics will likely remain in line for the rating. Nike's inventory levels rose 44% in the first quarter of 2023, driven by a...

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