Newsletter · · Ashutosh Agarwal
Nike Comeback Rests on a Tax Refund While Jewelry Lifts Luxury - Brands: Luxury, Sneakers & Apparel - Week of July 19, 2026
Consumer-brands podcast intelligence for the week of July 12 to 19, 2026. Four podcasts picked apart Nike's tax-refund-driven quarter, Levi's, Aritzia and Uniqlo kept compounding, and Richemont's jewelry-led beat lifted European luxury even as handbags stayed quiet.
Brands: Luxury, Sneakers & Apparel
Week of July 12–19, 2026: Nike Comeback Rests on a Tax Refund While Jewelry Lifts Luxury
This was a thin week for grand luxury debates and a very loud one for Nike. Four different podcasts pulled apart the same Nike earnings report, and they mostly landed in the same place: the "record" quarter was built on a one-time tax refund, not a real recovery, and nobody can agree on whether the worst is over. Meanwhile, the brands that are working, Levi's, Aritzia, Uniqlo, kept quietly stacking up numbers that make Nike's stall look even starker. Over in Europe, luxury's earnings season opened on a bright note, but the bright spot was jewelry, not handbags. Let's get into it.
1. Nike: a 407% profit jump that came from a courtroom, not a comeback
If you only read Nike's headline this quarter, you'd think the turnaround had arrived. Fourth-quarter net income was up 407%, and gross margin (the profit left after the cost of making the product) jumped 8.9 percentage points. That sounds like a business roaring back to life.
It wasn't. As The Watson Weekly (July 13) explained, back in February the Supreme Court threw out the tariffs Nike had been paying, and Nike booked a $986 million refund it now expects to collect. That single windfall "did almost all the work behind the margin jump," the host said, and, as he put it, "you can't build a franchise on a court ruling." Strip the one-timer out and look at the full year, and the picture flips: profit actually fell 3% to $3.1 billion, and revenue was flat at $46.4 billion.
The parts that were broken a year ago are still broken. Converse, the Chuck Taylor brand Nike owns, saw sales fall about a third last quarter, and its full-year operating profit collapsed from $240 million to just $18 million. That's not a slump; that's a brand in freefall. And China was down 12% in the quarter, Nike has spent quarters promising China would stabilize, and it simply hasn't. The one genuine bright spot: running has grown double digits for five straight quarters and added more than $1 billion in sales over that stretch, while North America keeps growing its top line. Real progress, but narrow.
Here's the tell that stuck with the host: in the very same press release where Nike trumpeted a 407% profit jump, it also cut its guidance for the first half of next year. As he put it, "a company that has genuinely turned the corner doesn't need to lower its own numbers a paragraph later." So the question isn't whether Nike had a good quarter, it's "has Nike found a floor, or did it just find the tariff refund?" The Watson Weekly
Even the professionals can't agree. Watson noted three big research shops came to three different conclusions off the same report: Jefferies called the bottom, Guggenheim said Nike isn't out of the woods, and Telsey thinks the soft demand runs all the way into 2028.
The Morning Filter (July 13) added the valuation math. Morningstar trimmed its fair-value estimate to $94 a share and explained why the stock is a coin-flip: it trades at 26 times this coming year's earnings (Nike's fiscal year ends May 31), which is not cheap, but only 14 times the following year's, if you believe the recovery shows up. To hit that better number, Morningstar is modeling 5% revenue growth next year and operating margin climbing to 12.3%, from about 6.8% this year, basically a return to Nike's normal profitability. "You've got to believe the 2028 story for the valuation to make sense," the analyst said, adding that the small post-earnings pop "quickly ran out of steam" and the stock still can't break above its June high. The Morning Filter
Smart Investing with Brent & Chase Wilsey (July 18) zoomed out to the damage. Nike closed at $43.76, down about 20% this year, 30% over 12 months, and a staggering 73% over five years from its late-2021 peak near $170. The quarter itself beat expectations (earnings of $0.20 a share versus $0.13 expected, revenue of $10.97 billion versus $10.86 billion), and the stock still fell 7% on the news. The Wilseys flagged a real risk hiding in the dividend: Nike yields about 3.8%, but it's paying out 78% of earnings and 111% of its free cash flow to fund it, meaning if the turnaround doesn't come, "that dividend will get cut." Their diagnosis of what actually went wrong echoed a line making the rounds: LeBron James recently said Nike has "lost its cool factor," and the hosts agreed, pointing to competition from Lululemon and years of possible under-investment in research and development. Their verdict, even after a 73% collapse: "still not a buy." Smart Investing with Brent & Chase Wilsey
One more structural point, from Remarkable Retail (July 14): even if the wholesale and online pieces come together, Nike won't get durable growth "unless they can figure out their own store strategy" too, and the host isn't convinced management is committed to that hard, expensive work. Remarkable Retail
Why it matters: the whole Nike bull case now rests on a margin recovery next year that the company itself just guided down for the first half of. Until running and North America can outrun a shrinking China and a dying Converse, "beat the quarter, cut the guide" is not a bottom, it's a holding pattern.
2. The other side of the ledger: Levi's, Aritzia and Uniqlo are quietly running away with it
The most useful thing about a bad Nike week is the contrast. On the same Remarkable Retail episode, the hosts walked through three apparel brands doing exactly what Nike can't.
Levi's, under CEO Michelle Gass, has staged a genuine turnaround. Overall sales rose 8%, net income jumped over 30%, the company raised its guidance, and gross margin hit nearly 63%, a striking figure for a business with a big, low-margin wholesale channel. Inventory was down (a sign of clean, disciplined operations). And crucially, Gass said about two-thirds of the sales growth came from selling more units, not raising prices, real demand, not just inflation. It's no longer just the classic 501 jeans, either: growth is coming from the women's and tops businesses too. For a brand as old and mature as Levi's, "you don't really see that too often," the host said.
Aritzia, the Vancouver-based women's fashion brand, posted numbers so good the host thought he'd misread them: same-store sales up 35% and total revenue up 43%. Its online business grew about 60%, and a mobile app it launched only last fall already drives roughly 30% of online sales. Even Canada, its oldest, most saturated market, grew 25%, which tells you the product itself is winning, not just the store count. It's opening aggressively in the US (aiming for a couple hundred stores, including one in a former Nordstrom space), and here too the growth came from more shoppers and more units, not price hikes. The hosts also tied a bit of the apparel strength to GLP-1 weight-loss drugs nudging people to refresh their wardrobes.
Uniqlo (owned by Japan's Fast Retailing) rounded it out with revenue up 22% and operating profit up nearly 40%, another raised forecast, and growth "from everywhere", North America, Europe, and notably China coming back, the very market crushing Nike. One vivid operational detail: extreme summer heat forced many of Uniqlo's European stores to close for days at a time, a reminder that weather is now a real line item for anyone with European retail exposure (Nike and Levi's included). Remarkable Retail
Why it matters: three very different, very mature brands are all growing on units and traffic rather than price, and all getting the mix of stores, online and wholesale right. That's the playbook Nike is being measured against, and falling short of.
3. European luxury opens strong, but the shine is coming from jewelry
Core luxury was quiet on the podcasts this week, but one hard data point landed. On Brew Markets (July 15), the earnings round-up noted Richemont, the Swiss group that owns Cartier, jumped more than 7% after a strong report: sales up 20% from a year earlier, to over $7 billion, with its all-important jewelry business up 24%, the seventh quarter in a row of double-digit growth. That set of numbers lifted the whole sector: LVMH and Hermès both rose more than 2.5%, and Gucci-owner Kering jumped over 4%. Brew Markets
Why it matters: it lines up neatly with last week's big theme, that shoppers, tired of ever-pricier handbags, are gravitating toward jewelry and watches they see as holding their value ("price per wear"). Richemont's jewelry-led beat is that shift showing up in the actual numbers. The read-through is a positive one for the sector's mood into earnings season, but it's a jewelry story first, soft goods (leather, ready-to-wear) still have to prove themselves.
4. How to do wholesale right: the Bombas playbook
The same Remarkable Retail episode featured Bombas CEO Jason LaRose, and it's a small clinic in brand discipline worth passing along. Bombas started in 2013 (an Indiegogo campaign, then Shark Tank, where it remains the most successful brand ever by revenue, about $2 billion in cumulative sales). It's still more than 70% socks, with footwear about 20%, and it's been profitable since day one, a rarity among the direct-to-consumer darlings of that era, many of which (Allbirds among them) "overshot the runway" chasing cheap growth and later stumbled.
The interesting part is how carefully Bombas picks its wholesale partners so the brand never feels cheapened. At Dick's Sporting Goods it shows running, golf, hiking and ski socks; at Nordstrom, dress socks; and at Target, casual socks for the suburban parent doing a family shop. When it tested Target over the holidays, it insisted on its own fixture and messaging, and Target never put the product on sale, not even on Black Friday. As LaRose framed it: don't ask "who could we sell to," ask "who are we trying to reach, and with what message." Remarkable Retail
Why it matters: it's the exact opposite of Nike's problem. Bombas grew by being deliberate about which shelves it appears on and never discounting; Nike spent years flooding wholesale, then trying to pull back, and is still untangling the brand damage.
5. The Adidas halo: a $500 shoe the company loses money on, on purpose
FT Tech Tonic (July 15) went deep on the Adidas Supershoe, the racing shoe that helped break the two-hour marathon barrier earlier this year, "one of the biggest breakthroughs in athletics in decades," per Adidas's head of running. The economics are almost a marketing exercise: it sells for $500, and Adidas openly says it loses money on each pair, the price "basically covers the cost of materials, not even the entire cost of development." Rules from the sport's governing body keep it (barely) legal: the sole can't exceed 40 millimeters and can hold only one stiffening element. Demand is so intense that a grey market has sprung up for pairs owned by sponsored athletes. Adidas is now pushing the same innovation story into cooling vests and even fan-cooling jackets for Formula One. FT Tech Tonic
Why it matters: this is exactly the "cool factor" LeBron accused Nike of losing, halo product that says this brand is at the frontier, sold at a loss because the credibility it buys is worth more than the margin. It's a soft data point, but a telling one about who's setting the pace in performance right now.
6. Beauty: the indie founders keep circling the majors
No public beauty catalysts this week, but a founder interview worth a note for the read-through. On Social Currency with Sammi Cohen (July 14), Saie founder Laney Crowell, an alum of Estée Lauder and Condé Nast, told the origin story of her skin-first makeup brand. Two things stand out for investors watching the big players. First, she raised money right when "D2C was dead," with Unilever Ventures as an early backer, a reminder that the strategics are seeding the next generation early. Second, the sheer power of Sephora as a kingmaker: Sephora approached her before launch, told her she wasn't ready, then in April 2020, with its stores closed for COVID, committed to launching Saie in every single door, and, crucially, Sephora pays for the shelf fixtures, a huge leg-up for a small brand. Social Currency with Sammi Cohen
Why it matters: the indie-beauty flywheel that keeps pressuring the majors runs straight through Sephora (owned by LVMH), cheap shelf access, funded fixtures, and a "next big thing" spotlight. It's the structural reason names like Estée Lauder keep losing shelf share to founders they trained.
What was silent this week
So you know what didn't come up (and where I'm not going to invent a story): contract manufacturers (Pou Chen, Yue Yuen, Feng Tay), travel retail and duty-free, Macau and Sands China, mall and outlet landlords, and the public beauty majors as earnings events (Estée Lauder, L'Oréal, e.l.f., Coty, Shiseido, Ulta) were all silent. Lululemon appeared only as a stick to beat Nike with; Birkenstock only as a name-check. And unlike last week, there was no direct discussion of Chinese luxury demand, the Richemont beat is the closest proxy we got.