Nike's Gross Margins

And, FedEx’s “improved profitability.”

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Today is Friday, March 22, 2024.

The Early Bird Index today is 73.28.

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Nike's Gross Margins

Although Nike (NYSE: NKE) reported good holiday season sales, concerns over its business in China sent the stock down 5.77% in after-hours trading on Thursday.

Financials: Nike reported earnings of 98 cents per share in the past quarter and revenue of $12.4 billion; both were better than expected.

Details: Sales in North America were good and the gross margin increased thanks to lower freight and logistics costs.

Yes, But: Nike’s forecast for full-year gross margins was lower than expected. Also, Nike’s business in China continued to disappoint. Sales in China totaled $2.08 billion, which was lower than expected.

Also: Revenue for Converse fell 19%. The company is considering a reduction of some supplies to cut down on costs.

Stock Price: Nike was down 5% in 2024 before these results.

Final Thoughts: Nike’s struggles mirror the same struggles throughout the retail industry. Lower consumer spending is a problem.

Notables

Notable Earnings Today: N/A.

Notable IPOs Today: Australian Oilseeds Holdings Limited Ordinary Shares (Nasdaq: COOT).

Notable Equity Crowdfunding Campaigns Ending Today: Arrive (PicMii), Saltwater Bakeshop (Mainvest), Bircus (Mainvest), Whisk It Good (Mainvest), R3 Printing (StartEngine), House Taco (Honeycomb), Taste Of Nature (PicMii), Homebody Yoga and Wellness (Mainvest).

Notable Economic Events Today: N/A.

FedEx’s “Improved Profitability”

Shares of FedEx (NYSE: FDX) surged by 12.92% in after-hours trading on Thursday, despite posting mixed financial results.

Financials: FedEx reported earnings of $3.86 per share in the past quarter, which was better than expected. But revenue only reached $21.7 billion, which was lower than expected.

Detail: Operating margins for both FedEx Express and FedEx Ground increased due to more cost-cutting from the company.

Also: FedEx plans to buy back $500 million in stock during the quarter to raise the stock price.

Quote: “FedEx delivered another quarter of improved profitability in what remains a difficult demand environment.” - CEO Raj Subramaniam.

Stock Price: FedEx is up 5% in 2024, including an 8% bump in the last 30 days.

Final Thoughts: FedEx is a good indicator of the overall economy. If FedEx is doing well, the economy generally is also doing well.

Lululemon’s Bad Outlook

Despite posting better-than-expected financial results on Thursday, shares of Lululemon (Nasdaq: LULU) fell 11.24% in after-hours trading.

Powering the Story: Lululemon only expects revenue in the current quarter to be in the range of $2.175 billion to $2.200 billion, which is lower than anticipated.

Final Thoughts: Lululemon was down 5% in 2024 before these results. The company is struggling as consumers become more picky.

Upvote: Reddit Shares Soar in Long-Awaited IPO (Wall Street Journal)

Bad Results: Accenture Lowers Fiscal-Year Revenue Guidance, Shares Tumble (Investor’s Business Daily)

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The contents of Early Bird are intended for informational and entertainment purposes only. They do not constitute trade or investment recommendations and they are not financial or legal advice. Readers are encouraged to consult licensed professionals for personalized guidance regarding their financial or legal situations.