Nike beat on earnings, so why the panic as NKE stock slides 10%?


  • Nike released earnings on Thursday, beating on the top and bottom lines.
  • Nike reported having higher inventory than wanted.
  • NKE  fell nearly 10% in afterhours trading.

Nike (NKE) was on the minds of investors Thursday as the sportswear giant unveiled its latest set of quarterly earnings. The headline results looked promising, but the stock still tanked 10% afterhours.

Nike stock news

Earnings per share (EPS) was forecast at $0.92, and it came in at $0.93. The revenue consensus forecast was at $12.2 billion and again the figure came in ahead at $12.7 billion. So far so good, right? Well, the devil is always in the details.

Inventories were up nearly $10 billion versus a year ago, a large increase. Margins were down to 44.3%, nearly two percentage points lower than last year. Margins were hit by logistics costs and that old chestnut, the strong dollar. Get ready for a swath of dollar-related margin issues in the Q3 earnings season. Nike said for 2023 it expects a $4 billion headwind from the strong dollar and a $900 million hit to bottom line EBITDA.

"Based on current spot rates, net of hedging activity, we estimate the full-year negative impact of foreign exchange on reported revenue and EBIT to now be approximately $4 billion and $900 million, respectively, creating a wide divergence in constant versus real dollar performance. [...] For the second quarter specifically, we expect reported revenue to grow low double digits on strong consumer demand despite 900 basis points of foreign exchange headwinds" said Nike CFO Matthew Freind.

Nike stock forecast

Nike was already in a powerful downtrend, and this has only added to it. Post or premarket, whichever is your fancy, Nike stock has cracked the psychological $90 area and then the pandemic support step at $92. This now opens the door to an extended decline to $60, the pandemic low. This is a huge discount to current levels but is the long-term trend.

Adding to the bearish outlook is the fact that Nike stock has cracked the 200-week moving average. This is a feat rarely achieved. The next key support is $84.26. This needs to be watched in the regular session for a reaction from the Relative Strength Index (RSI). Currently, we have a bullish divergence, which could indicate a possible short-term bottom. 

NKE weekly chart

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD pares gains below 1.0500 amid Conservatives German election win

EUR/USD pares gains below 1.0500 amid Conservatives German election win

EUR/USD pares gains back below 1.0500 in the European session on Monday. The pair still stays supportec by the German Conservatives Party win in the federal election, which revived hopes for better economic outlook. The upside remains elusive due to a cautious mood and mixed German IFO data. 

EUR/USD News
GBP/USD eases to near 1.2650 ahead of BoE-speak

GBP/USD eases to near 1.2650 ahead of BoE-speak

GBP/USD reverses gains to trade near 1.2650 in European trading on Monday. The pair eases as the US Dollar pauses its decline but the downside appears capped ahead of speeches from several BoE policymakers. 

GBP/USD News
Gold price remains stuck in multi-day-old trading range near all-time peak

Gold price remains stuck in multi-day-old trading range near all-time peak

Gold price continues with its struggle to gain any meaningful traction and remains confined in a multi-day-old trading range through the first half of the European session on Monday. Investors remain worried that Donald Trump's trade tariffs would trigger a global trade war which continues to act as a tailwind for the safe-haven bullion.

Gold News
Solana drops below $160, liquidating $26 million in leverage as negative funding rate weighs in

Solana drops below $160, liquidating $26 million in leverage as negative funding rate weighs in

Solana price extends its decline and trades around $160 on Monday after falling over 11% last week. The recent correction in SOL has triggered a wave of over $26 million in liquidations in the last 24 hours and $110 million last week.

Read more
Money market outlook 2025: Trends and dynamics in the Eurozone, US, and UK

Money market outlook 2025: Trends and dynamics in the Eurozone, US, and UK

We delve into the world of money market funds. Distinct dynamics are at play in the US, eurozone, and UK. In the US, repo rates are more attractive, and bills are expected to appreciate. It's also worth noting that the Fed might cut rates more than anticipated, similar to the UK. In the eurozone, unsecured rates remain elevated.

Read more
The Best brokers to trade EUR/USD

The Best brokers to trade EUR/USD

SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.

Read More

Forex MAJORS

Cryptocurrencies

Signatures

Best Brokers of 2025