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Nike share price down 1% despite Q4 results revenue beat

The shoe company had a mixed results report with lower earnings and higher revenue.

Nike logo after Nike Q4 earnings Source: Bloomberg

Nike share price is down 1% in US after hours trading after a mixed Q4 earnings report. The shoe company had better-than-expected revenue, but missed earnings expectations.

Nike earnings: key figures

Earnings per share $0.62
Revenue $10.18 billion

Nike revenue high, but earnings miss estimates

Nike’s earnings per share were $0.62, less than the predicted $0.66. Nike’s revenue exceeded the predicted $10.16 billion and was $10.18 billion.

Nike’s earnings per share likely dropped because of the shoe company’s new commitment to sell more merchandise directly to consumers online and depend less on wholesale suppliers. Despite the weaker Q4 earnings, Nike chief executive officer (CEO), Mark Parker, spoke about the positive aspects of the corporation’s Consumer Direct Offence direct-to-consumer strategy.

‘FY19 was a pivotal year for Nike as we continue to bring our Consumer Direct Offence to life throughout the marketplace. Our distinctive innovation and digital advantage led to accelerated growth across our complete portfolio, while our brand fueled deeper relationships with consumers around the globe,’ said Parker.

Despite the US-China tariff war that could impact Nike’s footwear production in the Asian nation, Nike sales in China jumped 22%. Nike’s North American sales increased by 7.5% with sales of its basketball division and Jordan brand.

Nike’s chief financial officer (CFO), Andy Campion, touted Nike’s Q4 revenue growth despite volatility in foreign currency rates.

‘Amid foreign exchange volatility, our double-digit currency-neutral revenue growth and expanding [return on invested capital] showcase Nike’s unrivaled ability to create extraordinary value for consumers and shareholders over the long term,’ said Campion.

How did Nike’s Q4 earnings compare to other shoe companies?

Nike’s Q4 results were worse than Adidas’ Q1 profits. Adidas’ Q1 results beat expectations, while Nike’s earnings underperformed.

Nike’s Q4 results were also worse than Under Armour's profits. Under Armour’s Q1 earnings and revenue beat estimates, while Nike’s Q4 results report was mixed.

What do analysts predict for Nike’s Q1 2020 outlook?

While Nike didn’t offer specific Q1 guidance, financial analysts predict earnings per share of $0.79. They also project $10.64 billion for Nike’s Q1 revenue.

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