The Jensen Investment Team Sells Position in Nike
April 2025
The Jensen Investment Team elected to sell Nike Inc (NKE) from the Jensen Quality Growth Strategy due to a deterioration in business fundamentals.
Founded in 1964, Nike is a global leader in athletic footwear and apparel. The company has long benefited from strong brand equity, global scale and deep customer loyalty. However, in recent years, Nike’s performance has lagged, weighed down by supply chain disruptions and more persistent challenges stemming from a miscalculated strategic shift. The company’s aggressive pivot toward a direct-to-consumer model resulted in a diminished wholesale presence, creating opportunities for emerging competitors such as Hoka and On to gain share. Simultaneously, we believe Nike underinvested in product innovation and leaned too heavily on short-term promotional activity, contributing to a loss of brand momentum.
We previously believed 2026 could represent an inflection point, supported by cleaner inventory levels, a rebound in wholesale partnerships, and signs of renewed focus on innovation and brand investment. However, more recent developments — particularly increased vulnerability related to potential tariff exposure — have introduced additional complexity and extended the anticipated recovery timeline. As a result, our conviction in Nike’s return potential diminished and we exited the position.
Strategy holdings are subject to change and should not be considered recommendations to buy or sell any security. Please click here to view a list of the Strategy’s current holdings.
The company discussion is solely intended to illustrate the application of our investment approach and is not to be considered a recommendation by Jensen. The specific security identified is taken from a representative account of the Jensen Quality Growth Strategy and does not represent all of the securities purchased and sold for the Strategy. Our views expressed herein are subject to change and should not be construed as a recommendation or offer to buy or sell any security and are not designed or intended as a basis or determination for making any investment decision for any security. Our discussions should not be construed as an indication that an investment in a security has been or will be profitable, or that the investment recommendations or decisions we make in the future will be profitable or will equal the investment performance of any security discussed herein.
Certain information contained in this material represents or is based upon forward-looking statements, which can be identified by the use of terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “target,” “project,” “estimate,” “intend,” “continue” or “believe” or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events or results or the actual performance of a client account may differ materially from those reflected or contemplated in such forward-looking statements.
This information is current as of the date of this material and is subject to change at any time, based on market and other conditions.
Jensen Investment Management, Inc., is an investment adviser registered under the Investment Advisers Act of 1940. Registration with the SEC does not imply any level of skill or training. Although taken from reliable sources, Jensen cannot guarantee the accuracy of the information received from third parties.
© 2025 Jensen Investment Management
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