Nike Q1 Earnings Highlights: EPS Beats As North American Sales Slide, Shares Move Higher

2 years ago

Nike Inc (NYSE:NKE) reported first-quarter financial results after the close Thursday. Here's a look at the key metrics from the quarter.

Transcript

00:00 Nike here, EPS 94 cents beats the 74 cent estimate.

00:04 Sales of 12.93 billion missed the 12.98 billion.

00:09 Nike executive said member engagement

00:12 within DTC business up double digits versus last year.

00:17 Also said to expect to report revenue to growth

00:20 mid single digits for the full year.

00:23 North America sales were down 2% year over year.

00:26 Greater China sales were up 5%.

00:30 European sales climbed to 8%.

00:32 Asia Pacific and Latin America sales were up 2%.

00:36 Nike direct revenues were up 6%.

00:39 And then Nike's brand digital sales also increased 2% here.

00:44 Wholesale revenues were flat.

00:46 - The whole reason Nike is trading up 9% here this morning

00:50 is that expectations were absolutely in the gutter.

00:55 There was nothing really great in this report,

00:58 but if one report on the right day

01:01 because we had a huge reversal in the overall market.

01:03 So they were hungry for stocks.

01:04 And two, they're like, it's good enough.

01:06 Let's go, let's buy.

01:08 And then the call and the guidance was okay.

01:10 Everything was just okay at Nike.

01:13 This is not like, oh my goodness,

01:14 did you see that Nike report?

01:16 So you're getting a nice pop.

01:18 It's a relief pop, major resistance up at a hundred bucks.

01:21 Basically just because expectations were in the gutter

01:24 going into the print.

01:25 - I don't know if we talked about this

01:28 on the closing print,

01:29 but I mean, you look at that upper right chart

01:31 and have you ever seen a more bullish chart?

01:34 I mean, how could you be short going into the report

01:37 with something like that?

01:39 I mean, it just-

01:39 (laughing)

01:40 - I'm telling you, man.

01:42 Those are the ones you wanna be going long into the report.

01:45 - I know.

01:46 - This is how it works.

01:47 When they're going straight up,

01:48 you wanna be short going into the report.

01:49 When they're going straight down,

01:50 you wanna be long into the report.

01:51 That's the way this earnings season worked.

01:53 I mean, we're at the end of it now,

01:54 but that is totally the way this earnings season worked.

01:56 It's a simple game, folks.

01:57 It's a simple game.

01:58 - 18.

01:59 - Spinner talks about this all the time in the chat.

02:00 I do too.

02:01 Expectations low, easy to beat low bar.

02:04 Expectations high, like, you know,

02:07 go back to the Nvidia quarter.

02:08 That was amazing.

02:09 And they sold off on it.

02:11 It's all about expectations.

02:13 - Mitch, what did you say about the B2C?

02:15 Could you just repeat that?

02:16 Because I've just noticed less Nike stuff in the stores

02:20 and maybe they're trying to get, you know,

02:22 people more direct and not go through the stores.

02:24 Was that something that was put in?

02:26 - Yeah, D2C business of double digits versus last year.

02:30 And so one thing that we've seen Nike

02:33 completely make the move in is that before it was like,

02:37 okay, how can we get this into all the shoe retailers

02:40 out there, every store?

02:42 Now it's, okay, let's just give them some model

02:47 and let's, some models,

02:48 and let's actually just sell it directly to the consumer.

02:52 And this is the move that we're seeing

02:53 what's really affecting Foot Locker, right?

02:56 That's what's really given them the hit

02:59 is that more and more companies are looking at D2C

03:02 and that actually helps them with expenses, right?

03:04 They're just able to keep it at the Nike factory

03:07 versus shipping it to Foot Locker,

03:10 then them having to go ahead and ship it to their stores,

03:13 put it out.

03:15 - Oh yeah, and pay them too.

03:17 Yeah, yeah.

03:18 - There's no point in Nike doing anything else

03:21 but selling it directly to you.

03:23 - Feeling like, I'm gonna try and fill a gap here up to 99.03

03:28 and Dennis mentioned the psychological $100 level.

03:32 So, if you have a profit target in this area,

03:36 take it 97, 98, 99.

03:39 I almost looked at the straddle in this thing too,

03:41 because I was thinking, man, this can't move five, six,

03:44 seven bucks and here it is up eight and a half bucks.

03:47 I think a little bit longer term,

03:49 we'll see what happens with this move.

03:51 If it's just a gap and go and it builds on it.

03:54 I would like to see some kind of pullback.

03:57 I don't think we'll get to the top of yesterday's range

04:01 at 89 and change.

04:02 So, let us settle out 100 big psychological number.

Nike Q1 Earnings Highlights: EPS Beats As North American Sales Slide, Shares Move Higher

Category

Transcript

Be the first to comment

Recommended