HomeFinancial MarketsNike Stock Takes 13% Dive Amid Ballooned Inventory

Nike Stock Takes 13% Dive Amid Ballooned Inventory

Nike released its latest earnings results on Thursday, and it’s safe to say the investors were not impressed by the report. The Nike stock (NKE) plunged around 13 percent after the results were made public, dropping from a $95.45 close on Thursday to $83.35 on Friday morning.

Nike reported $12.69 billion in net sales compared to $12.31 billion expected while also coming at $0.93 in earnings per share versus $0.92 estimated by Wall Street experts. However, despite the positives, the company’s earnings revealed quite a few negatives.

The biggest concern for the investors was Nike’s ballooned inventory caused by cautious consumers and economic slowdown. The company’s inventories are up 65 percent in North America and 44 percent up year-over-year.

Also, it didn’t help that Nike saw a big drop in gross profit margins and missed out on Wall Street estimates. The sportswear and footwear giant reported a 44.3 percent gross profit margin compared to the 45.4 percent expected.

However, despite these red flags, Nike remains confident about a positive outlook for the closing period of the year. 

“We plan to compete… in a more promotional environment,” Nike CFO Matt Friend said on Thursday. “And given the macro uncertainty that’s out there for the consumer, we’re taking a more measured approach, and we’re tightening our inventory buys around the world based on some of the risks that could materialize in the second half.”

Rent Prices Fall for Third Straight Month

Rent prices for apartments across the United States fell for a third consecutive month in November, data from the real estate platform RealPage has...

Discover Credit Card Spending Shrinks Amid Inflation

Discover Financial Services confirmed that spending on its credit cards has slowed down in recent months as inflation hits a 40-year high and signs...

Euro Zone Retail Sales Slip in October

Euro Zone retail sales were lower than expected in October, data released on Monday by the European Union's statistics office revealed. This indicates a...