Nike Runs into China Problems

Plus, a spot Solana ETF filing.

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Today is Friday, June 28, 2024.

The Early Bird Index today is 74.89.

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Nike Runs into China Problems

Footwear and apparel company Nike (NYSE: NKE) fell 12.37% in after-hours trading on Thursday after reporting disappointing financial earnings results and a weaker outlook.

Financial Earnings: Nike reported earnings of $1.01 per share in the past quarter, which was better than expected. But revenue only reached $12.6 billion, which was lower than expected.

Details: Revenue fell because growth stagnated in China and sales declined in North America. Digital sales decreased 10%. Converse sales plummeted 18%.

Outlook: Nike now expects sales for the new fiscal year to decline. The company is lagging behind consumer trends and struggling due to a weak market in China.

Early Bird’s Nest Egg Gains: Nike entered the Chinese market in 1981, giving it a significant head start over many competitors. China makes up about 15% of Nike’s overall sales, but the past few years have been challenging.

  • Nike faced boycotts and consumer backlash in China in 2021 due to the company’s position against Xinjiang-made cotton.

  • The company struggled due to the pandemic and lower consumer spending.

  • Now Nike faces increased local competition from companies in China such as Li-Ning and Anta.

Stock Price: Nike was down 11% in 2024 before these results.

Final Thoughts: Just because Nike is down doesn’t mean this is the time to buy it. Early Bird Prime warned in April not to buy Nike.

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Notable Earnings Today: N/A.

Notable IPOs Today: LandBridge Company LLC (NYSE: LB), Alumis Inc. Common Stock (Nasdaq: ALMS).

Notable Equity Crowdfunding Campaigns Ending Today: ScanHash (Netcapital), NetWire (Netcapital), Sazi Foods (Netcapital).

Notable Economic Events Today: Core PCE Price Index / PCE Price Index (8:30 a.m. ET), Personal Spending (8:30 a.m. ET), Chicago PMI (9:45 a.m. ET), Michigan Consumer Expectations / Sentiment (10:00 a.m. ET), Fed Monetary Policy Report (11:00 a.m. ET).

VanEck Files for Solana Spot ETF

The price of the cryptocurrency Solana jumped 8% on Thursday because the first step to having a spot Solana ETF (exchange-traded fund) was taken.

Details: Investment manager VanEck filed for a spot Solana ETF on Thursday, which could be the first ETF of its kind in the United States.

Definition: A spot ETF gives traditional investors direct access to investing in an asset, in this case, Solana.

Background: We’ve already seen spot ETFs for Bitcoin approved, and Ethereum will likely get approval soon.

Final Thoughts: This is great for Solana, but keep in mind the approval process for the ETF could take a while.

Infinera Jumps After Nokia Deal

Infinera (NASDAQ: INFN), a supplier of optical networking tools, surged 18.06% in after-hours trading on Thursday after Nokia (NYSE: NOK) acquired the company.

Final Thoughts: Nokia is already up 9% this year.

Lower Consumer Spending: Walgreens Plans Major U.S. Store Closures; Shares Tumble (Wall Street Journal)

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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.