Nike Inc NKE Shares traded lower on Friday after the company reported financial results for the first quarter that showed an increase in inventories at the end of the quarter. Sales in the Greater China region also declined year-on-year.
Nike said revenue for the fiscal first quarter rose 4% year over year to $12.7 billion, topping analyst estimates of an average of $12.27 billion Gasoline Pro. The company said its revenue results were led by a 14% growth in Nike Direct. Nike Brand Digital’s business grew 23%, driven by double-digit growth in EMEA, North America and APLA, partially offset by declines in Greater China. Revenue in China fell 16% year over year.
Nike reported quarterly earnings of 93 cents per share, beating median estimates of 92 cents per share. Earnings fell 20% year over year.
Total inventories rose 44% to $9.7 billion, according to Nike, due to increased inventories in transit due to continued supply chain volatility, partially offset by strong consumer demand during the quarter.
“NIKE’s first quarter results lay the foundation for another year of strong growth,” said NIKE Matthew’s friendExecutive Vice President and CFO of Nike.
“Our focus remains on the consumer as we take action to manage near-term momentum while expanding long-term structural advantages through our Consumer Direct Acceleration strategy.”
Related link: Nike Q1 Earnings Highlights: Revenue and EPS Beat, Investors Pull Inventory, China Concerns
Analyst Rating: Several analysts adjusted target prices for the stock following the company’s quarterly results.
- Citigroup analyst Paul Lejuez kept Nike at a neutral stance, lowering the price target to $93 from $113.
- RBC Capital analyst Piral Dadhania endorsed Nike to outperform and lowered the price target to $115 from $125.
- Wedbush analyst Tom Nikic endorsed Nike as outperforming and lowered the price target to $101 from $121.
- Morgan Stanley analyst Alex…
