9/28/2023: Nike Stock Soars after Earnings Report
Nike reported quarterly earnings after market close today. Revenue was $12.94B vs. $12.99B expected. Adjusted EPS was $0.94 vs. $0.75 expected. Gross margin was 44.2% vs. 43.7% expected. Inventories fell down 10% to $8.7B vs. $8.84B expected. Overall, the results are better than expected. NKE 0.00%↑ stock had fallen from $102 at the beginning of the month to $89.63 at market close today. After the report, NKE 0.00%↑ stock soars 8+%.
Nike saw revenue in Greater China at $1.74B vs. $1.83B expected or a paltry 12% YoY growth after adjusting for currency exchange. This is bad as investors have expected more growth from the China reopening. In addition, Greater China saw QoQ sales decline while North America and EMEA saw QoQ increase. Nike’s growth heavily depends on China and the company is now set to enter a slow growth period with muted China growth. NKE 0.00%↑ stock is trading at ~25 P/E ratio. It’s not too expensive as a prominent consumer brand but it’s not cheap either. I will be interested in owning the stock if it goes below $80 but I will stay put for now.