Nike, Inc. ($NKE) Earnings (Q1 FY23)

 Nike, Inc. ($NKE) Earnings and Opinion:


Nike is a company in the Consumer Cyclical sector and operates in the Footwear & Accessories industry. The company designs, develops, markets, and sells men's, women's, and kids athletic footwear, apparel, equipment, and accessories worldwide. Nike was founded in 1964 and is currently headquartered in Beaverton, Oregon. The company made its debut on the stock market in 1980. 

Nike Earnings Results:

  • Revenues of $12.69B beating expectations of $12.295B
  • Gross Profit of $5.62B beating expectations of $5.57B
  • Operating Profit of $1.84B beating expectations of $1.77B
  • Adjusted EPS of $0.93 in line with expectations 
  • Inventories 39.7% over expectations
Opinion:
Nike had negative sentiment from their earnings report. The company reported earnings after the market closed on Thursday. Nike saw a decline of almost 13 percent in Fridays trading session. A lot of the concern is credited to the inventories. The earnings report was not bad at all, the investors are just a little skeptical about the inventory levels. One of the positive things to take away from the report has to be the digital growth. They saw a 470bps beat from estimates and is a positive thing with digital shopping becoming more popular. As far as current valuation goes, Nike has a P/E ratio of 21.57 and a P/S ratio of 2.79. They have a current ratio of 2.63, which is a super comfortable metric. Cash also outweighs the debt, which is a good sign. In my opinion, Nike is a company that seems to be a little expensive right now, but looks a lot more attractive after the recent drop in the market. I like the side of the digital growth that is growing right now. Revenue growth seems to slowing down a bit, and that makes sense with the supply chain issues occurring. Inventories have to be a big concern here, with that much still on hand, shows signs of sales slowing down. I could see down trend with the stock price in the short-term. However, keep a close eye on the upcoming quarters and any news coming out to see if they can adjust to current economic issues in the market. 


*Information from Consensus Gurus, CMLVIZ, Capital IQ, Yahoo Finance

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