Nike Inc | $NKE Stock | Shares Drop Despite Upbeat Q1 Earnings

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Nike Inc (NYSE: NKE)

 

Nike shares fell as much as 4% in the extended trading session on Tuesday despite the apparel retailer reporting a 15% profit growth and a 10% jump in sales for its fiscal 2019 first quarter.

The company surpassed the expectations of Wall Street analysts on both the top and bottom lines, aided by a superb performance in its North America segment.

Earlier this month, shares of the sneaker giant suffered one of their worst days on the New York Stock Exchange. The drop came after the company announced that it would feature Colin Kaepernick, a former San Francisco 49er quarterback as the face of its “Just Do It” advertising campaign.

NKE stock closed normal hours of trading with a gain of $0.52, or $0.62% to trade at $84.79 on Tuesday. The shares have rallied nearly 35% year-to-date and 50% year-over-year.

NKE Earnings & Outlook

The company announced a net income of $1.1 billion, or $0.67 per share during the quarter, up from $950 million, or $0.57 per share, in the same period last year. Sales came in at $9.95 billion, up 10% from $9.1 billion in the year-ago quarter.

Thompson Reuters based on analyst estimates, was expecting the company to come out with adjusted earnings of $0.63 per share on $9.94 billion revenue.

North America segment recorded sales growth of 6% during the three months to August 3, 2018. This is the second-consecutive quarter that the segment has posted an increase in sales.

The Middle East, Europe & Africa segment sales grew 9% as the Greater China division went up 20%. Revenue from Asia Pacific & Latin America segments increased 14%.

Selling and administrative expenses totaled to $3.1 billion during the quarter, an increase of nearly 7% from the year-ago quarter. The increase in expenses is perhaps the most probable reason why shares of the company fell in after-hours trading.

Nike Executive Comments

The President and CEO Mark Parker had this to say on the results, “NIKE’s Consumer Direct Offense, combined with our deep line up of innovation, is driving strong momentum and balanced growth across our entire business. Our expanded digital capabilities are accelerating our complete portfolio and creating value across all dimensions as we connect with and serve consumers.”

Nike Chief Financial Officer, Andy Campion also issued these remarks, “We are delivering stronger global growth and profitability than we anticipated entering this fiscal year. While foreign exchange volatility has increased, our underlying currency-neutral momentum continues to build as we transform how NIKE operates, drives growth and creates value for our shareholders.”

Nike, Inc. Company Profile

Nike, Inc. is engaged in the design, development, marketing, and sale of athletic footwear, apparel, accessories, equipment, and services. It operates through the following segments: North America; Europe, Middle East & Africa; Greater China; and Asia Pacific & Latin America; Global Brand Divisions; Converse; and Corporate.

The North America; Europe, Middle East & Africa; Greater China; and Asia Pacific & Latin America segments refers to the design, development, marketing, and selling of athletic footwear, apparel, and equipment. The Global Brand Divisions represents NIKE Brand licensing businesses.

The Converse segment designs, markets, licenses, and sells casual sneakers, apparel, and accessories. The Corporate segment consists of unallocated general and administrative expenses. The company was founded by William Jay Bowerman and Philip H. Knight in 1964 and is headquartered in Beaverton, Oregon. – Yahoo Finance

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