Nike Q4 results: ‘the report is quite messy’

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Nike Inc (NYSE: NKE) reported better-than-expected results for its fiscal fourth quarter on Monday. Shares are trading up after-hours.

Notable figures in Nike Q4 financials results

  • Net income printed at $1.4 billion versus the year-ago figure of $1.5 billion
  • 90 cents per-share earnings were below 93 cents in Q4 of the previous year
  • Revenue went up 1.0% YoY to $12.2 billion, as per the earnings press release
  • FactSet consensus was for 81 cents a share of EPS on $12.1 billion in sales
  • Sales and administrative expenses were 8.0% higher in the recent fiscal quarter

Nike, however, reported an 80 basis points hit to its gross margin that stood at 45%. Discussing the earnings report on CNBC’s “Closing Bell: Overtime”, Oppenheimer’s Brian Nagel said:

It almost seems like Nike’s clearing itself out of these headwinds and preparing for smoother results ahead. So, I think the underlying trends are good, but the report itself is quite messy.

Nike announces an $18 billion buyback programme

According to the sports apparel and footwear company, its investments in DTC resulted in an 8.0% increase in overhead costs as well in Q4.

The Board at Nike Inc authorised a four-year stock repurchase programme worth $18 billion on Monday. It will replace the current $15 billion buyback that ends in FY23. Nagel added:

I see buybacks as a vote of confidence from within the company. So, I think it’s a positive. It’s suggestive that Nike’s moving past the really heavy investment phase.

The Oppenheimer analyst dubs the stock “attractive” at current valuation and is not sold on the idea that the U.S. economy is headed for a recession. He, therefore, rates Nike at “outperform” and sees upside to $195 – a close to 80% increase from here.

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Source: https://invezz.com/news/2022/06/27/nike-q4-results-the-report-is-quite-messy/