Nike Stock Slips on Its Mixed Earnings Report

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Nike posted revenue of $10.4 billion for its latest quarter.

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Nike

Shares posted minor losses after hours on Thursday after the athletics giant reported fiscal third-quarter sales that were just short of expectations.

Nike (ticker: KE) said it earned $1.4 billion, or 90 cents per share, on revenue that rose 3% year-over-year to $10.4 billion. Analysts were looking for earnings per share of 76 cents on revenue of $11 billion.

Nike was down 0.5% at $142.53 in the latest trades.

Nike’s earnings report was highly anticipated, with a number of analysts raising their estimates in the days leading up to it. In that sense, the shortfall may be a disappointment for some investors, even if more granular sell data was more bullish.

The Nike brand’s digital sales jumped 59% in the quarter, with its online business registering double-digit increases in all geographies. Sales of Nike Direct, part of the company’s effort to sell to consumers rather than third-party retailers, soared 20% to $4 billion. Sales in Greater China jumped 51%.

The company said gross margin increased 130 basis points in the period ended Feb. 28. Fixed costs fell 7% to $3 billion.

Still, those hoping for a quicker turnaround in its key market in North America were likely disappointed to see a 10% decline in revenue there. Online growth in North America also slowed from triple digits in the prior quarter. Nike blamed supply chain issues – telegraphed ahead of the report – such as shipping delays and port congestion. Similar issues have weighed on sales in Europe, the Middle East and Africa, a region that is also experiencing continued physical store closures.

Nike stock is up just over 1% year-to-date, after posting gains of 103.5% in the past 12 months.

Write to Teresa Rivas at [email protected]

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