Nike Stock Dips on Mixed Q3 Report
Shares of Nike (NKE:US) are trading modestly lower on Wednesday despite the sportswear retailer reporting better-than-expected results for its third fiscal quarter.
Revenue soared 14% year-over-year to as much as $12.39 billion, easily ahead of the $11.52 billion consensus, as the company used its wholesale channels to clear excess inventory. Earnings per share came in at $0.79, cruising the $0.54 expectations.
The sales beat was driven by outperformance in the North American region where sales rose 27% YoY. On the other hand, the China region continues to decline in terms of revenue growth, down nearly 8% YoY.
Direct sales were reported at $5.3 billion. Despite initiatives to reduce inventory, it still increased by 16% to $8.91 billion. The gross margin contracted by 330 basis points YoY due to lower selling prices as the sportswear brand worked down its excess inventory.
On the forecast front, Nike sees FY revenue growth in high single-digits; which translates into flat to low single-digit revenue growth for Q4.
“NIKE’s strong results in the third quarter offer continued proof of the success of our Consumer Direct Acceleration strategy," said John Donahoe, President and CEO, NIKE, Inc. "Fueled by compelling product innovation, deep relationships with consumers and a digital advantage that fuels brand momentum, our proven playbook allows us to navigate volatility as we create value and drive long-term growth."
Congressman Ro Khanna is an active trader of Nike shares. The Representative from California was both buying and selling NKE shares in recent months, including the $15,000 - $50,000 purchase of the stock on November 03, when it closed at $90.40.
Shares closed at $125.61 on Tuesday.
