Nike (NKE) shares fell more than 2% in early trading on Friday after reporting earnings that missed estimates as its margins were squeezed by higher costs and cuts from a decline in consumer spending.
- Nike shares fell more than 2% in early trading Friday after reporting earnings that beat estimates.
- Nike reported net income of $5.07 billion, down 16% from a year ago, and earnings per share of $3.27, down 15% from a year ago. Both missed analysts’ estimates.
- Higher costs and margins squeezed Nike’s margins as consumers pulled back from discretionary spending.
The sportswear retailer reported net income of $5.07 billion, down 16% from a year ago. earnings per share (EPS) at $3.27, down 15% from a year earlier. Both missed analysts’ estimates.
The company said that his gross margin fell 140 basis points to 43.6% due to “higher product input costs and increased transportation and logistics costs, higher margins and continued unfavorable changes in net foreign currency exchange rates.
Some bright spots for Nike included sales growth in the Greater China region as COVID-19 lockdowns eased, with sales there reaching $1.8 billion for the quarter, up 16% year-over-year (year-over-year). Nike’s global soccer business also grew 25% year-over-year, while sales from Jordan’s apparel and sneaker lines hit $6.5 billion, up 29% year-over-year.
Nike President and CEO John Donahoe said he expects the company’s partnership with popular athletes such as Erling Haaland and LeBron James could provide a “huge opportunity” for the company.
Nike shares fell more than 4% year-to-date after Friday’s decline.