Nike beats on earnings, just misses on sales
(Vaughn Ridley/Getty)
Nike on Tuesday reported quarterly profits that topped the most bullish forecast on Wall Street and sales that slightly missed expectations.
The company posted adjusted earnings per share of $0.68 on revenues of $8.4 billion. Analysts had expected Nike to report adjusted EPS of $0.53 and revenues of $8.47 billion, according to Bloomberg.
Last quarter, Nike decided to stop publishing futures orders — an important measure of demand from retailers — saying it would mention them during the earnings calls as it deems appropriate.
Total orders were estimated to grow 3.4% worldwide and decline 1.2% in North America.
Gross margin fell by 140 basis points to 44.5%. Higher selling costs and foreign-currency hits offset a higher average selling price, Nike said.
Ahead of the earnings, traders placed a record amount of bets that Nike shares would decline, according to S3 Partners. Short bets against Nike have climbed by $774 million, or 62% this year, and have crossed the $2 billion mark for the first time ever. Nike shares have fallen 8% over the past year. They shed as much as 2% in volatile after-hours trading following the earnings release.
Nike is vulnerable to any trade restrictions or tariffs implemented by President Donald Trump's administration. The strong US dollar could also pose a problem as Nike looks to grow in China.
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