Nike: The Comeback Kid
Nike reported good earnings which significantly beat the street’s expectations, suggesting that the company’s logistics-related issues we highlighted in our last report appear to be behind it. The company reported EPS of 0.85 vs. estimates of 0.65 and revenues of $13.3B vs. estimates of $12.57B. Lower inventories ($9.3B vs $9.7B in Q2) suggest that the company’s strategy of selling direct to consumers is bearing fruit. We retain a buy rating for Nike.
Nike Inc: Pulling up their socks
Shares of Nike Inc fell sharply in aftermarket trading after missing on gross margin expectations. GM narrowed to 44.3% and mgmt reiterated that GM may decline another ~50bps this fiscal year. Revenue grew – up 10% on a currency neutral basis; Nike Direct sales were up 16% cur. neutral and Nike Online grew 23% cur. neutral. Inventory grew 40%. Diluted EPS were down 20% YoY (0.93), slightly beating analyst’s estimates.
