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Non-Tech : Nike -- Ignore unavailable to you. Want to Upgrade?

To: Adam Nash who wrote (2320)	3/20/1999 7:37:00 AM
From: Duker	Read Replies (1) \| Respond to of 2403

I tend to trust PK et. al. more than I trust most managements. [Part of that stems from the fact that PK is such a large owner of the company. You may not like him, but he is not just an "empty suit" ... he lives and breathes the Swoosh.] I am not sure that he had the systems and/or the people in place to really get a grip on the business a year and a half ago. That is not atypical for a company that had grow as large as quickly as Nike. For an interim CFO, BH has done a pretty fair job sizing the business. I think they have the OpExp number pretty baked-in (i.e., they will say that they will come in at $2,500 and $2,600 next year and they will do a bit better ... predictability and linearity help those Street folks sleep better at night). The only question I have for him is why is the tax rate so high (cash and GAAP)? Overall, the product side seems much better -- running and basketball, not apparel. On running, they are really echoing the sentiments of Venator and others. Basketball is still a tough comps game year over year with Jordan. Cancellation rates are trending way down, and the futures numbers adjusted for these lower rates will translate into better year over year sales growth. Inventories look pretty tight. I appreciated PK's candor about the advertising campaigns for Alpha and March Madness. He as much said that they were awful (though not as poor as the critics would have you believe .... but awful relative to the products that they are trying to support). I like the direction on "the spend more supporting the products and spend less on building out the campus in Beaverton." [sidenote: This is also quite comforting for any shareholder of Venator ... more support from the Mother Ship never hurts!] From a valuation standpoint, looking out the next couple of years, it is pretty fairly/fully priced. For me, this a core holding that I bought a very good prices. As such, I will hold it through the noise of the next several years ... unless there is some fundamental change. [i.e., this becomes a POS company (which I think means Point of Sale company like Par Technology) ... or PK starts going out with a teen/teenager ... or people begin running in brown shoes or clogs ...] --Duker