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A ~10% drop in revenue but an outsized ~40% drop in profits probably indicates more than a 'brand decay' problem?
by Incipient 9mo ago
A ~10% drop in revenue but an outsized ~40% drop in profits probably indicates more than a 'brand decay' problem?
- 7777777phil 9mo agoA 40% profit drop on 10% revenue decline reflects the nasty operating leverage built into Nike's model: high fixed costs in marketing, athlete deals, and retail commitments that don't scale down when sales slow. That's part of why brand decay is so expensive for these businesses. My angle was more like once the music stops, you're still paying for the orchestra.