Nike Inc: Here’s Why Nike Stock is Going Crazy Today
NKE Stock Plunges After Earnings
Nike Inc (NYSE:NKE) stock tumbled more than four percent in after-hours trading on Tuesday. Why? The company just reported earnings.
On Tuesday, Nike reported financial results for the first quarter of its fiscal 2017 which ended August 31, 2016. Revenue grew eight percent year-over-year, to $9.1 billion, which also beat Wall Street’s expectation of $8.87 billion. On a currency neutral basis, revenue would have been up by ten percent. (Source: “Nike, Inc. Reports Fiscal 2017 First Quarter Results,” Nike Inc, September 27, 2016.)
The bottom line improved as well. For the quarter, earnings came in at 73 cents per share, up nine percent year-over-year and smashed analysts’ estimate of 56 cents per share.
“Fueled by an incredible summer of sport, Nike delivered strong global growth—and led the industry through disruptive innovation,” said Nike’s Chairman, President, and Chief Executive Officer Mark Parker in a statement on Tuesday.
“Q1 also showed how we’re amplifying every category through sports style innovation, transforming retail by connecting the digital and physical experience and ushering in a new Era of Personalized Performance – through product, consumer connections and our supply chain. NIKE’s strategic investments in these growth opportunities continue to deliver long-term value to our shareholders,” he continued. (Source: Ibid.)
In the quarter, the company spent approximately $1.1 billion repurchasing a total of 19.0 million of its own shares as part of its four-year, $12.0 billion program.
So, with solid growth in both top and bottom line, why is Nike stock down so much?
Well, the answer lies in futures orders. Nike said that futures orders for Nike brand athletic apparel and footwear scheduled for delivery from September 2016 through January 2017 totaled $12.3 billion. While the number is seven percent higher on a currency neutral basis compared to last year, analysts were expecting a year-over-year increase of between nine and 10 percent.
After the earnings release, Nike stock slipped as much as 4.45% in after-hours trading on Tuesday. Year-to-date, NKE stock has plunged 15.3%.
Dear Reader: There is no magic formula to getting rich. Success in investment vehicles with the best prospects for price appreciation can only be achieved through proper and rigorous research and analysis. We are 100% independent in that we are not affiliated with any bank or brokerage house. Information contained herein, while believed to be correct, is not guaranteed as accurate. Warning: Investing often involves high risks and you can lose a lot of money. Please do not invest with money you cannot afford to lose. The opinions in this content are just that, opinions of the authors. We are a publishing company and the opinions, comments, stories, reports, advertisements and articles we publish are for informational and educational purposes only; nothing herein should be considered personalized investment advice. Before you make any investment, check with your investment professional (advisor). We urge our readers to review the financial statements and prospectus of any company they are interested in. We are not responsible for any damages or losses arising from the use of any information herein. Past performance is not a guarantee of future results. All registered trademarks are the property of their respective owners
Sign up to receive our FREE Income Investors newsletter along with our special offers and get our FREE report:
5 Dividend Stocks to Own Forever
This is an entirely free service. No credit card required. You can opt-out at anytime.
We hate spam as much as you do.