Nike (NKE) reported fourth-quarter sales that beat Wall Street expectations, but earnings fell short of expectations after Thursday’s bell.
Nike stock fell about 3% after the report.
Gross margins fell to 43.6% in the quarter ended May 31 from 45% a year earlier. Nike said in its statement that the decline was “primarily due to higher product entry costs and higher freight and logistics costs, higher markdowns and continued adverse movements in net exchange rates. currencies – partially offset by strategic pricing actions”.
Here’s how Nike’s results compare to Wall Street analysts’ expectations, according to Bloomberg Consensus Estimates:
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Income: $12.83 billion vs $12.59 billion expected
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Adj. earnings per share (EPS): $0.66 against $0.67 expected
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Estimated gross margin: 43.6% vs. 43.5% expected
Shares of Nike stumbled in the report, with shares down 6% on the year and analysts slashing their price targets on the sportswear brand’s stock in recent weeks. Fears had swirled about dwindling North American demand and difficult revenue growth in Greater China due to COVID-19 restrictions.
Nike showed a recovery in Greater China with sales of $1.81 billion, above the $1.64 billion expected by analysts and up 16% from a year ago. Inventories were almost flat compared to a year ago, raising hopes that Nike’s inventory glut has improved.
“It looks like there is a nice progression here [in Greater China revenue]Brian Nagel, managing director and principal analyst at Oppenheimer & Co., told Yahoo Finance Live. have been lifted, and we get that number here…directionally, that’s where the market wants to see it.”
Josh is a reporter for Yahoo Finance.
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