Spiros Segalas (Trades, Portfolio), manager of the Harbor Capital Appreciation Fund, eliminated his positions in Nike Inc. (NKE, Financial) and O’Reilly Corp. (ORLY, Financial) during the third quarter.
Nike
Segalas sold his 9,409,454-share stake of Nike for an average price of $56.13 per share. With this transaction, the guru trimmed 2% of his portfolio. Based on GuruFocus estimates, Segalas lost approximately 11% on the stock.
Although the company reported good growth in international markets, Nike’s domestic sales growth tumbled 3% due to short-term promotional headwinds in the broader marketplace. Chief Financial Officer Andy Campion mentioned in the earnings call that management observed the U.S. retail landscape will “continue to be disrupted by the accelerating customer shift to digital and more personal brand experiences.” Such headwinds resulted in a 22% decline in the company’s diluted earnings per share.
Management expects a gross margin decline of 0.5% to 1% from the prior year due to the challenging dynamics in the U.S. retail landscape.
O’Reilly
Segalas sold 1,418,760 shares of O’Reilly for an average price of $198.08 per share. With this transaction, the guru trimmed 1.35% of his portfolio. Based on GuruFocus estimates, Segalas lost approximately 16% on the stock.
O’Reilly CEO Greg Henslee mentioned the company faced a “more challenging sales environment” over the past six months. The company said third-quarter comparable sales are expected to range between 1% and 3%. O’Reilly expects diluted earnings between $3.10 and $3.20 per share for the quarter, in line with the company’s second-quarter earnings.
Disclosure: The author has no positions in the stocks mentioned.
