Nike Surges on Better-Than-Feared Results
Nike Inc (NKE:US) reported its fiscal first-quarter results, revealing a profit that exceeded expectations but revenue slightly below Wall Street estimates.
The company posted a net income of $1.5 billion, or 94 cents per share, compared to $1.47 billion, or 93 cents per share, in the same quarter the previous year. Revenue inched up to $12.94 billion, compared to $12.69 billion in the prior year quarter.
Matthew Friend, Executive Vice President & Chief Financial Officer of NIKE Inc. said, “Our first-quarter results demonstrated the impact of staying on the offense over the past fiscal year. With a healthy marketplace and another quarter of brand and business momentum, we are strengthening our foundation for sustainable, profitable, long-term growth.”
Analysts anticipated Nike to report earnings per share of 76 cents on revenue of $13 billion.
The company's gross margin dipped by 10 basis points to 44.2%, attributed to higher product costs and a challenging foreign-exchange environment, partially offset by strategic pricing actions. Still, this is better than the expected contraction of 43.7%.
Nike's inventory decreased by 10%, aligning with market expectations for businesses to reduce unsold goods stockpiles.
Converse shoe sales amounted to $588 million, marking a 9% decline, primarily driven by weaker demand in North America. However, growth in the Asian market countered this decrease. Nike executives noted double-digit growth in China and emphasized their increasing share of the athletic gear market in the region.
Nike shares were down 24.5% year-to-date through Thursday’s close. Several Congress members traded the stock throughout 2023, including Ro Khanna, Kathy Manning, and Shelley Moore Capito.
