NKE Inventory Declines Despite Earnings, Revenue Exceeds; Swiss Pear ONON rises

Nike (NKE) reported its third-quarter fiscal results late on Tuesday, with sales well ahead of expectations and earnings not falling as much as expected. NKE shares fell after hours, following a solid run in Tuesday’s session. Meanwhile, smaller pear Holding on (ONON) broke out on strong earnings and guidance.


Dow Jones footwear and apparel giant Nike is a benchmark for the global consumer economy. The results wrap up the reporting season for Dow Jones Industrial stock.

Nike earnings

estimates: Analysts polled by FactSet expect Nike to drop 36% year-over-year earnings per share to 56 cents. Sales are up nearly 6% to $11.482 billion.

Results: Diluted earnings fell a much smaller than expected 9% to 79 cents per share. Sales increased 14% to $12.39 billion. Gross margins fell 330 basis points to 43.3%, weaker than some forecasts. That was due to higher write-downs to liquidate the stock, and several other factors. Despite the liquidations, inventories rose 16% to $8.9 billion, driven primarily by higher product imports and freight costs, the company said.

Cash and cash equivalents fell 20% to $10.8 billion.

Outlook: Wall Street forecasts earnings per share of $13.15 in 2023, down 16% from 2022. They expect sales to grow 7% for the full year, versus Nike’s low-to-mid single-digit guidance.


Nike shares lost 1% in extensive trading. Shares rose 3.6% to 125.61 on Tuesday’s stock market, retaking the 50-day mark.

Since bottoming out last October, Nike shares are up about 59% to their recent high of 131.31. Now NKE share has formed a flat base with a buy point of 131.41. It moved sideways below its 50-day moving average as it bases.

A decisive move above the 50-day line could break Nike stock back above the downtrend line in the near term. That would provide potential early entry for aggressive investors.

ON Holdings, a member of the prestigious IBD Leaderboard, rose 26.4% to 27.26 on Tuesday. Technically, the ONON stock has cleared a buy point of 24.21 cups with handle. But the stock market is in a correction, discouraging investors from making new purchases.

The Swiss-based shoe and sportswear provider nearly doubled sales in the fourth quarter year-over-year. On Holdings also delivered “strong results in 2023”, including a 61% revenue growth in the current quarter.

The company cited “the exceptional continued momentum across all regions, channels and product groups, combined with a normalization of product supply and a significantly improved inventory position.”

Including shoe stocks, Foot Locker (FL) rose 5.6% on Tuesday after falling 5.7% on Monday on weak guidance. Skechers (SKX) and Deckers outside (DECK) gained 2.5% and 4.7% respectively. Crocs (CROX) was up 2.6%.

Shares were largely up on Tuesday, building on Monday’s relief rally.


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