US markets
U.S. stocks were in the red on Friday morning, with consumer sentiment for June revised lower to 78.1 in the final June reading. The Dow Jones Industrial Average fell 2.19% to 25,185, the S&P 500 index lost 1.80% to trade around 3,028 and the Nasdaq Composite Index was down 1.74% to 9,841.
Gainers
• The Gap, Inc. (GPS, Financial) +28%
• eBay Inc. (EBAY, Financial) +2.8%
• NetApp, Inc. (NTAP, Financial) +2.4%
• Best Buy Co., Inc. (BBY, Financial) +1.4%
Losers
• Huntington Bancshares Incorporated (HBAN, Financial) -9.5%
• Citizens Financial Group, Inc. (CFG, Financial) -9%
• Capital One Financial Corporation (COF, Financial) -8.8%
• Comerica Incorporated (CMA, Financial) -8.6%
Global markets
The main European stock markets traded in the green. The UK's FTSE 100 gained 0.79%, France's CAC 40 advanced 0.45%, Germany's Dax was down 0.26% and Spain's Ibex 35 slid 0.53%.
In Asia, Japan's Nikkei 225 gained 1.13%, India’s BSE Sensex jumped 0.94%, Hong Kong's Hang Seng dipped 0.93% and China's Shanghai Composite was up 0.30%.
Nike releases earnings report
Shares of NIKE, Inc. (NKE, Financial) fell almost 5% on Friday morning after the company announced its fiscal fourth-quarter 2020 earnings results after the closing bell the previous day. The company posted a loss of 51 cents per share, falling short of analysts’ estimates by 54 cents. Revenue of $6.31 billion declined 38.0% year-over-year and missed expectations by $950 million.
CEO John Donahoe had the following to say:
“We are uniquely positioned to grow, and now is the time to build on NIKE's strengths and distinct capabilities. We are continuing to invest in our biggest opportunities, including a more connected digital marketplace, to extend our leadership and fuel long-term growth.”
The gross margin declined 820 basis points to 37.3% due to higher costs by factory cancellation charges, increased inventory obsolescence reserves and the increase in fixed costs on lower wholesale shipments due to the pandemic.
Looking at the financial position, the company had total liquidity of $12.5 billion at the quarter's end. Cash and equivalents and short-term investments totalled $8.8 billion, up $4.1 billion from last year due to a $6 billion corporate bond issuance. Further, the company secured another $2 billion credit facility.
Nike reported that approximately 90% of company-owned stores were open as of Thursday, including all of the stores in China.
Jerome Dodson (Trades, Portfolio) added 46% to his investment in the company for a total of 288,257 shares. Philippe Laffont (Trades, Portfolio) boosted his holding more than 31,000% to 1,380,668 shares.
Disclosure: The author holds no positions in any stocks mentioned.
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