Nike shares up 7.8% on good earnings and a cut in inventories
Fiscal first quarter earnings beat Wall Street estimates, sending shares in Nike up almost 8% all-session on the IG platform.
It reported a profit of 94 cents per share, easily beating estimates of 75 cents per share, on revenues of $12.94 billion, marginally missing analysts' estimates of $12.98Bln. It didn't give a precise forecast for the second quarter, instead telling the markets that second quarter revenue would be slightly higher. But what was taken as good news was that Nike's inventories fell 10% during the quarter, indicating the company was successful in reducing excess product ahead of the holiday season.
Nike Q1 earnings
Nike, the popular sportswear company, recently announced their strong earnings for the first quarter of the fiscal year. This news exceeded expectations and caused the company's shares to increase by nearly 8% after the regular trading hours. The company's profit per share was 94 cents, surpassing the predicted 75 cents. While NIKE did not give a specific forecast for the second quarter, their total revenues of approximately $12.9 billion were in line with market expectations. However, they did mention that there might be a slight increase in revenue for the second quarter. Analysts had predicted a 2.1% rise to $13.59 billion in revenue.
The COVID-19 pandemic impact on Nike's sales
One positive aspect of Nike's performance is that they successfully reduced their inventory by 10% during the quarter. This indicates that Nike managed their surplus products well before the holiday season, which eased investors' worries about potential discounts. Consequently, NIKE's share price saw a significant increase of 7.8%, reaching $96.63. Looking at the long-term chart, we can see the impact of the COVID-19 pandemic on Nike's sales. During the lockdown period, people purchased sportswear for home workouts, leading to a rise in Nike's sales. However, as the pandemic situation improved, people's buying habits changed, and sportswear, especially sneakers or trainers, became less trendy. In response, Nike shifted its focus towards heavier footwear designed for walking and hiking.
It remains uncertain how Nike will perform in this new market trend. Currently, the company's shares have opened positively on the trading platform, with a gain of 7.8% in yesterday's trade. The market will continue to monitor Nike's performance as they adapt to evolving consumer preferences and uphold their financial outlook.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Seize your opportunity
Deal on the world’s stock indices today.
- Trade on rising or falling markets
- Get one-point spreads on the FTSE 100
- Unrivalled 24-hour pricing
See opportunity on an index?
Try a risk-free trade in your demo account, and see whether you’re on to something.
- Log in to your demo
- Try a risk-free trade
- See whether your hunch pays off
See opportunity on an index?
Don’t miss your chance – upgrade to a live account to take advantage.
- Get spreads from one point on the FTSE 100
- Trade more 24-hour indices than any other provider
- Analyse and deal seamlessly on smart, fast charts
See opportunity on an index?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
