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Omar Venerio
Omar Venerio
Articles (1399) 

Nike Down Despite Earnings and Revenue Beat

Earnings beats by six cents and beats on revenue

Wall Street is set to open flat after consumer spending jumped the past month. Outlays rose a seasonally adjusted 0.6% last month, while personal incomes advanced 0.3%. Moreover, inflation measured by the PCE price index inched up 0.2% in November and 1.8% in the past 12 months. The core PCE index, which excludes food and energy, rose 0.1% in the month and accumulated an annual rate of 1.5%, lower than the Fed's target.

However, in Friday pre-market trading, shares of NIKE Inc. (NYSE:NKE)traded down about 4% on the back of the company posting its financial results for the second quarter of its fiscal 2018. The company reported an annual net sales growth of 4.5% to $8.55 billion, while its profit advanced to 46 cents per share. Moreover, the results exceeded analysts’ estimates by six cents in EPS and $150 million in revenue.

Mark Parker, Nike chairman, president and CEO, said that for the second part of the year, “the company’s innovation line-up is as strong as it’s ever been and we’ll continue to actively shape retail through new differentiated experiences.”

Despite gross margins declining 120 basis points to 43%, during the period Nike had enough cash to repurchase a total of 16.7 million shares for $902 million as part of the $12 billion program.

Gainers

• Telenav Inc. (NASDAQ:TNAV)

• Envision Healthcare Corp. (NYSE:EVHC)

• Party City Holdco Inc. (NYSE:PRTY)

• Cintas Corp. (NASDAQ:CTAS)

Losers

• Long Island Iced Tea Corp. (LTEA)

• Celgene Corp. (NASDAQ:CELG)

• SCANA Corp. (NYSE:SCG)

• Digital Power Corp. (DPW)

Global markets

The main European stock markets traded lower. The U.K.'s FTSE lost 0.15%, Germany's Dax closed down 0.28%, France's CAC traded lower 0.43% and Spain's Ibex was down 1.18%.

In Asia, Japan's Nikkei closed up 0.16%, India’s BSE Sensex jumped 0.55%, Hong Kong's Hang Seng gained 0.72% while China´s SSE Composite retreated 0.09%.

Disclosure: The author holds no positions in any stocks mentioned.

About the author:

Omar Venerio
Omar Venerio is a capital markets, derivatives, corporate finance and financial management professor. He is passionate about the stock market and providing independent fundamental research and hedge fund and insider trading-focused investigation.

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