Nike (NKE) reported its third-quarter financial results late Tuesday with revenue easily beating expectations and earnings falling not as much as expected. NKE stock rose in late trading, after posting a slight advance in Tuesday’s session. Meanwhile, the youngest peers on hold (Onon) on strong earnings and guidance.
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Dow Jones footwear and apparel giant Nike is a leader in the global consumer economy. Its results conclude the reporting season for the Dow Jones Industrial Average.
Nike earnings
estimatesAnalysts polled by FactSet expect Nike to post a 36% drop in earnings per share, year over year, to 56 cents. Revenue is expected to rise by approximately 6% to $11.482 billion.
resultsDiluted earnings fell much less than expected by 9%, to 79 cents per share. Revenue jumped 14% to $12.39 billion. Gross margins fell 330 basis points, to 43.3%. That was due to higher write-downs for inventory liquidation, and many other factors. Despite the liquidation, inventories rose 16% to $8.9 billion, the company said, primarily driven by higher product inputs and freight costs.
Cash and cash equivalents fell 20% to $10.8 billion.
prospects: Wall Street expects 2023 EPS at $13.15, down 16% vs. 2022. They expect a 7% revenue increase for the full year, against Nike’s low-to-mid single-digit guidance.
NKE Stock, ONON Stock
Nike shares rose 3.6% to 125.61 in the stock market Tuesday, after closing up 0.7% on Monday. The Dow jumped again on Tuesday on hopes that the banking crisis will abate.
Since plummeting last October, Nike shares are up nearly 59% to a recent high of 131.31. Now NKE stock has formed a solid base at 131.41 buy points. It has been moving sideways below the 50 day moving average while at the base.
A decisive move above the 50-day line could cause Nike stock to break back above the downward sloping trend line in the short term. That would provide a potential early entry for enterprising investors.
ON Holdings, a reputable member IBD Leaderboard, rose 26.4% to 27.26 on Tuesday. Technically, ONON stock cleared 24.21 cups with a buy point handle. But the stock market is in a correction, which discourages investors from making new purchases.
The Switzerland-based sportswear and apparel provider nearly doubled sales last quarter, year-over-year. On Holdings also channeled “strong results in 2023,” including sales growth of 61% in the current quarter.
The company noted “continued exceptional momentum across all regions, channels and product groups, along with normalization of product supply and significantly improved inventory position”.
Among other shoe stocks, foot locker (fl) rose 5.6% on Tuesday after falling 5.7% on Monday amid weak guidance. Skechers (SKX) And outdoor deckers (deck) profit of 2.5% and 4.7%, respectively. Crocs (CROX) advanced 2.6%.
Stocks rose broadly on Tuesday, building on Monday’s rebound.
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