TSOH Weekly Roundup (04/10/26)
TSOH Weekly Roundup #2
Welcome to the second edition of the TSOH Weekly Roundup, which will be in your email inbox each Friday at 11am ET. Each update features a Chart of the Week and a brief discussion on three news items relevant to the TSOH investable universe. If you have feedback on this format, please let me know.
Chart Of The Week
As discussed in Monday’s update, Crocs is a brand that has weathered two decades of calls for its inevitable demise (albeit with bumps along the way). Despite these worries, the brand has managed to deliver high-single digit annualized unit volume growth over the past ten years. While management has some issues to navigate at Crocs and at HeyDude, adept execution - if achieved - would likely result in a rewarding 2-3 years ahead for investors.
Three Notable Items
“Nike Can’t Fix Its China Problem”
I have long been focused on Nike’s competitive position in China, starting with the July 2022 initiation: “If you let the numbers tell the story, you’d likely conclude Nike faces a real threat from [regional competitors].” Those concerns have since proven prescient; China is a major headwind to Nike’s turnaround efforts, particularly given its margin trajectory in the region.
“Long a key growth driver - and Nike’s biggest market outside North America - China has become a thorn in its turnaround efforts as Nike faces fiercer local competition and cooling consumer demand. In a scheduled all-hands staff meeting to discuss the latest results, CEO Elliott Hill sought to rally employees. ‘We have got to respond. I’m so tired, and I know you are, too, of talking about fixing this business,’ Hill said, according to a meeting transcript.”
“Gambling.com Group Announces Senior Management Transition”
As discussed in the GAMB initiation, I think there has been a disconnect between management’s professed confidence in the legacy business and their capital allocation. That cautious view was somewhat validated by the latest results, with a >30% reduction in the number of new depositing customers (NDCs) added during Q4 FY25 – by far the worst YoY result the company has reported to date. The timing of this CEO change, which follows some public disclosures by Gillespie about the level of insider buying at the company, raises more questions about what lies ahead for Gambling.com.
“Gambling.com announced that Chairman, CEO and Co-Founder Charles Gillespie will be appointed Executive Chairman of the Board and that current COO and Co-Founder Kevin McCrystle will succeed Mr. Gillespie as CEO. Mr. McCrystle also currently serves on GAMB’s Board of Directors and he is based at the Company’s U.S. headquarters in Charlotte, North Carolina.”
“The $40 Billion Game of Youth Sports Has Only One Winner: Dick’s Sporting Goods”
I remain interested in athletic apparel and athletic equipment retailing, with Dick’s Sporting Goods standing in a clear leadership position. (Academy Sports + Outdoors and Hibbett are also of interest to me, with the latter acquired by JD Sports in 2024.) With ‘House of Sport’, Dick’s is discovering whether they’ve found a revitalized retail format that can live up to Ed Stack’s vision: “We need to build the concept that kills Dick’s Sporting Goods.”
“When parents open their wallets at Dick’s, they find a reason to keep coming back. When annual spending cracks $500, they earn access to the premium tier of the loyalty program and exclusive benefits like deals and early product releases. There are now more than 8 million shoppers with this elite Dick’s status and they account for 50% of the company’s total sales… The first Dick’s ‘House of Sport’ location opened five years ago. Now there are 35.”
TSOH Updates
Here’s the updated TSOH research list for the past six months:
Monday’s report will be an initiation on Planet Fitness (PLNT), a company that led the growth of U.S. HVLP gyms over the past 10+ years – and with it, has seen its stock price climb ~4.5x since the IPO. Does the recent price weakness (stock down 30%+ YTD) present an opportunity, or are heightened competitive intensity and C-suite instability indicative of cracks in the story?
Have a great weekend!
NOTE - This is not investment advice. Do your own due diligence.
I make no representation, warranty, or undertaking, express or implied, as to the accuracy, reliability, completeness, or reasonableness of the information presented in this report. Assumptions, opinions, and estimates expressed in this report constitute my judgment as of the date thereof and are subject to change without notice. Projections are based on a number of assumptions, and there is no guarantee that they will be achieved. TSOH Investment Research is not acting as your advisor or in any fiduciary capacity.