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Nike Shares Jump as Ackman’s Return Sparks Turnaround Hopes

The logo of Dow Jones Industrial Average stock market index listed company Nike (NKE) is seen in Los Angeles, California, United States, April 12, 2016. (Reuters)
The logo of Dow Jones Industrial Average stock market index listed company Nike (NKE) is seen in Los Angeles, California, United States, April 12, 2016. (Reuters)
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Nike Shares Jump as Ackman’s Return Sparks Turnaround Hopes

The logo of Dow Jones Industrial Average stock market index listed company Nike (NKE) is seen in Los Angeles, California, United States, April 12, 2016. (Reuters)
The logo of Dow Jones Industrial Average stock market index listed company Nike (NKE) is seen in Los Angeles, California, United States, April 12, 2016. (Reuters)

Nike shares gained nearly 4% on Thursday as investors hoped the return of billionaire William Ackman as a stakeholder could spark a turnaround at the sportswear giant that has been battling with strategy missteps and tough competition.

Ackman's hedge fund Pershing Square Capital Management now owns roughly 3 million shares of Nike, amounting to a stake of about 0.19%, a filing showed on Wednesday. He has not revealed any plans for the investment yet.

"He's going to have the ear of the executives at Nike and be able to lend some influence on maybe how to get the ship righted, as it were, for Nike at this point in time to try and find their way back home," said Brian Mulberry, client portfolio manager at Zacks Investment Management, which owned $25.79 million worth of Nike shares as of June.

The stock has lost nearly a third of its value this year and the company has forecast a drop in annual sales for fiscal 2025, leading some Wall Street analysts and investors to raise the possibility of a management shake-up including CEO John Donahoe.

When an activist investor comes in, the ultimate goal "will be replacing the person that sits in the corner office," said Art Hogan, chief market strategist at B Riley Wealth.

"And I say that because the template for that has been very clear this week in the form of Starbucks."

Starbucks poached Chipotle CEO Brian Niccol earlier this week, tapping the industry veteran behind the burrito chain's turnaround to revitalize growth at its coffee outlets.

Niccol joining Chipotle in 2018 was also the result of one of Ackman's pressure campaigns that have often led to CEO changes at companies including J.C. Penney and Air Products and Chemicals.

Ackman last invested in Nike in late 2017, around the time when the company was losing market share in North America to a reinvigorated Adidas.

He exited Nike a few months later in 2018, making roughly $100 million in profit by cashing out of the 0.71% stake - a rare passive investment for the billionaire investor.

Analysts and investors hinted on Thursday it might be early days for Ackman's second stint as an investor at Nike and he will need to build a larger stake to make an impact.

Nike's forward price-to-earnings ratio for the next 12 months, a common benchmark for valuing stocks, was 24.26, compared with Adidas' 36.75.

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Fashion

Dolce & Gabbana Launches New Perfume for Dogs

A model presents a creation from the Dolce & Gabbana Fall/Winter 2024 collection during Fashion Week in Milan, Italy, February 24, 2024. (Reuters)
A model presents a creation from the Dolce & Gabbana Fall/Winter 2024 collection during Fashion Week in Milan, Italy, February 24, 2024. (Reuters)
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Dolce & Gabbana Launches New Perfume for Dogs

A model presents a creation from the Dolce & Gabbana Fall/Winter 2024 collection during Fashion Week in Milan, Italy, February 24, 2024. (Reuters)
A model presents a creation from the Dolce & Gabbana Fall/Winter 2024 collection during Fashion Week in Milan, Italy, February 24, 2024. (Reuters)

Fashion house Dolce & Gabbana has launched a new alcohol-free perfume for dogs called ‘Fefé’ in honor of Domenico Dolce ’s poodle, but not all vets and pet owners agree it's safe or appropriate.

The perfume costs 99 euros ($108) for 100 milliliters (3.4 ounces) and has been certified suitable for animal use. It follows a Safe Pet Cosmetics protocol designed to ensure a degree of safety of cosmetic products for animals comparable to that required for humans, Dolce & Gabbana said.

“Through a compliance recognition to this protocol granted by Bureau Veritas Italia, participating companies demonstrate their sensitivity in creating products that ensure the safety and respect of the animal, in accordance with established standards,” the company said in the statement issued for the launch of the perfume, The AP reported.

Bureau Veritas Italia is a publicly held company that provides inspection, laboratory verification and certification services.

All of the dog owners consulted agree that the fragrance is “gentle and well accepted by their pets,” and veterinarians approve of the product, according to the company web page dedicated to ‘Fefé’, which cites performance reviews by veterinarians and customers.

But not all veterinarians agree on the use of perfumes for dogs, as they may interfere with the animal's sense of smell and cover up bad odors that could be a symptom of diseases.

“Dogs recognize themselves by smells, they recognize a person by a smell,” said Federico Coccía, a veterinarian in Rome who holds a doctorate from the University of Teramo.

“When the dog arrives, he sees you, wags his tail, but first smells you and then recognizes you because you are stored in one of his ‘smell drawers.’ Therefore, this world of smells should not be changed,” Coccia added.

Coccia said becoming aware of an ongoing dermatological disease can be problematic if dogs’ natural odors are covered up. “In the case of sebaceous dermatitis, for instance, the smell somehow completes my diagnosis.”

“The smell of breath, the smell of earwax are disguised by the perfume. So, it could be a problem even for us vets,” Coccia said.

Among the enthusiastic users of pet fragrances are groomers who take care of the hair and aesthetics of dogs.

Aliof Rilova Tano, a dog groomer at Morgana Carpentieri’s La Boutique delle Birbe parlor in Rome, said that in general he is in favor of using fragrances for pets.

“Our dogs live with us, so a little dog at home on the couch next to us with a perfume is always pleasant,” he said.

Grooming customers often feel the same way, so much so that customer Mariarita Ricciardi said she is in favor of “anything that has to do with a natural scenting ... and that can also help the quality of the hair.”

However, there are also pet owners who would never use perfumes on their animals.

“Especially brand perfumes, it seems to be a very exaggerated process of humanization,” said Francesca Castelli, a dog-owner strolling in Rome’s Villa Borghese.