Analysis of inventories in the Sporting Goods industry
Hi, I'm initiating the coverage of Sporting Goods stocks for my pod.
I would like to know what inventory ratios people are generally using to analyze the inventory position of those stocks ?
Thanks in advance
I imagine your firm pays good money to sell-side for exactly this purpose.
They also pay me not to trust the sell-side completely.
Don’t worry you can trust me. I’m an anonymous buysider here on WSO. My analysis from Googling “sporting goods inventory ratio” tells me industry average is 2.71 from CSImarket.com.
That suggests someone like NKE might have too much inventory over the next few quarters and they might have to start discounting heavily which will hurt margins. My EBIT numbers are 20% below street and I have 30bps delta in operating margins. I think NKE is a short on this thesis.
My highly differentiated view on industry inventory turnover numbers is the main driver of this thesis. Don’t worry - you can trust me. I’m a buysider (allegedly).
Are you OK dude ?
Looks like someone got trapped in the classic Long PUMA/Short ADS...I know it hurts
I feel stupid having to explain this to you but my point is just go ask sellside what inventory ratio they use instead of random ass people on WSO.
I get it. I will just keep using WSO forum to know what to choose between being Partner at KKR or being PM at Bridgewater.
Sorry to ask things about the actual job instead of asking if its possible to make 19 figures at a MMHF after 3 YoE.
This was fantastic and kind of scary because I feel like I have thought like this - I swear my thesis is differentiated because I didn't see it mentioned in any of the 4 sell side reports I have on this stock!
OP what do you think about ASO?
I think sporting goods and outdoor leisure overearned during COVID and are over inventoried (bullwhip) and will suffer discounting, margin compression and earnings revisions - especially RV/boat/powersports/grills. Could be wrong
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