Nike Stock Crashes on Fourth Quarter Earnings Pace, $18 Billion Share Buyback


Updated at 5:46 PM EST

Nike (NKE) – Get the report from Nike Inc. released stronger-than-expected fourth-quarter results on Monday as strong gains in its direct-to-consumer business offset a Covid-related sales slump in China and a spike in transportation costs.

The group’s shares fell, however, after forecasting fiscal 2023 revenue to rise by “low single digits” from 2022 levels, thanks in part to headwinds from a stronger US dollar. strong, with profit margins dropping as much as 50 basis points. points.

Nike said earnings for the three months ending May were 91 cents per share, down 2 cents from the same period last year but well ahead of Street’s consensus forecast. of a profit of 81 cents. Group revenue, Nike said, was up 1% from a year ago at $12.24 billion, just ahead of analysts’ estimates of a total of $12.075 billion.

Gross profit margins narrowed 80 basis points to 45%, just below Street’s estimate of 46.6%, as input and transportation costs rose. North America revenue was down 5%, but direct-to-consumer sales were up 7%, helping to offset both the impact of a stronger US dollar and lower sales in China Covid-related.

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The group also said it has authorized an $18 billion share buyback, which will span the next four years.

“Nike’s results this fiscal year are a testament to the unparalleled strength of our brands and our deep connection to consumers,” said CEO John Donahoe. “Our competitive advantages, including our innovative product pipeline and expanding digital leadership, prove our strategy is working as we create value through our relentless drive to serve the future of sport.”

Shares of Nike were marked up 3.17% in after-hours trading immediately after the earnings release to point to a Tuesday opening price of $107.00 apiece.

Last week, Nike, which suspended operations in its stores and e-commerce channels in Russia and Ukraine earlier this year, said it would scale back operations over the next few months and leave the county permanently. Nike said the move would result in a charge of around $150 million.

This decision follows similar decisions by blue chip US companies such as Starbucks. (SBUX) – Get the Starbucks Corporation report and McDonald’s (MCD) – Get the McDonald’s Corporation reportwhich sold its operations in Russia earlier this month and suffered a non-cash hit of around $1.3 billion.


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