Nike Stock News – Excessive Seasonal Inventory Hurts Shares
The latest Nike stock news has shares down more than 13%. This comes after a large 44% increase of excess inventories from the most recent quarter. Increased delivery times and consumer demand has greatly affected the company’s supply chain recently.
Nike CFO Matt Friend elaborated on the challenges the company has faced:
I could not be more proud of how our team continues to adapt to changing circumstances with a relentless focus on getting the right product to the right place at the right time. This quarter, it became clear to us that conditions in North America are shifting once again.
Earlier ordering by retailers, driven by strong consumer demand and less predictable delivery timelines, had led to elevated inventory levels broadly across consumer goods. Then transit times began to rapidly improve with signals that further improvement may be coming. At the same time, consumers are facing greater economic uncertainty, and promotional activity across the marketplace is accelerating, especially in apparel. As a result, we faced a new degree of complexity.
Nike will look to offer discounts to combat the excess inventory. Friend continued his positive outlook, by viewing Nike’s growth with a longer-term lens:
Since fiscal ’19, our digital business has nearly tripled to exceed $10 billion in revenue, representing 24% of total NIKE brand revenue in fiscal ’22. Over this period, NIKE Direct gross margins expanded through the combination of rapid digital growth and improvements in channel margin profitability, ultimately fueling NIKE’s overall gross margin expansion despite being partially offset by transitory headwinds experienced through the pandemic.
Nike Stock News – Stock Updates
It’s not a surprise that Friend referenced 2019 in order to display positive growth. You almost have to go back that far to see Nike Inc (NYSE: NKE) below current levels. This year alone, Nike stock has dropped more than 42%. At close yesterday, Nike was the eighth lowest priced stock on the Dow Jones Industrial Average at $95.33.
Despite the recent negative Nike stock news, the sports apparel and footwear brand is gearing up for the challenges ahead:
Now I’ll turn to our updated financial outlook for fiscal ’23. To date, we continue to see strong consumer demand for our portfolio of brands across our geographies. We are closely monitoring consumer confidence and behavior, and ultimately, the implications of high inflation on consumer demand. We’ve managed through cycles like this before, and we know these are times to stay on the offense, leveraging our financial strength to prioritize a quicker return to a healthy bull market.
Nike Stock News – Innovation
The company continues to focus on its bread and butter… shoes. With new innovations coming out of their line including the Peg 39, Pegasus, Invincible, Infinity, and what the company calls “the Must-Win 6.”
Also, the LeBron 20 recently launched, continuing the basketball superstar sneaker dynasty. The Lebron 20s are already hard to get, if not sold out. The Air Max Scorpion will also be a shoe to watch over the next six to twelve months. Between, NIKE and Jordan, the company continues its dominance in the basketball shoe space.
In addition to shoes, Nike’s Alate women’s fitness line (bras and tights) has generated positive early responses from consumers.
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