Nike share price down 3% after Q3 earnings revenue beat
The shoe company's stock tumbles after weaker-than-expected sales.
Nike share price fell 3% in US afterhours trading after the sneaker company released its third quarter( Q3) earnings report. Nike’s revenue fell slightly below Wall Street expectations.
Nike earnings: key figures
| Earnings per share | $0.68 |
| Revenue | $9.61 billion |
| Net income | $1.1 billion |
| North America sales | $3.81 billion |
Nike share price down 3% as Q3 earnings revenue beats estimates
Nike’s earnings per share was $0.68, higher than the expected $0.65. Nike’s Q3 revenue was $9.6 billion, slightly higher than financial experts’ and the corporation's own estimates. Chief executive officer, (CEO), Mark Parker, said Nike’s profits grew because of the company’s investment in digital sales.
‘In Q3, our team once again drove strong, healthy growth across Nike’s complete portfolio. Our business momentum is being accelerated by our ability to scale innovation at a faster pace and expand new digital consumer experiences around the world,’ said Parker.
Though Nike’s earnings and revenue exceeded expectations, North American sales dropped below Wall Street estimates. The shoe company’s sales on the continent were $3.81 billion, less than the $3.85 billion predicted by financial analysts.
While Nike’s revenue in North America was worse-than-expected, Nike’s profits in China improved, with sales at $1.59 billion, a 19% increase. The shoe company’s chief financial officer, Andy Campion, touted the corporation’s growth in the Asian nation.
‘The Consumer Direct Offense is delivering broad-based growth across all four of our geographies, led by continued momentum in China,’ said Campion.
How do Nike’s Q3 results compare to other sneaker companies?
Nike’s Q3 results are positive, but not better than competitor Under Armour’s Q4 results. Under Armour's sales and share price improved in its last earnings report, but Nike's did not.
Did exploding shoes hurt Nike’s profits in North America?
Nike had high sales in North America, but not enough to please Wall Street. Nike’s profits were better-than-expected, but overshadowed by worse-than-expected North American sales. Nike’s revenue could possibly have been affected by a scandal last month. A new sneaker fell apart on Duke University player Zion Williamson’s foot and briefly injured the player in a recent game. Kian Salehizadeh, analyst at investment firm Blockforce Capital, said the incident could have impacted sales.
‘While it’s not very clear what caused the domestic weakness, it’s possible that the news of what happened with the Duke University player’s [Zion Williamson] shoe had a short-term negative impact,’ said Salehizadeh.
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