Nike shares climb as it beats forecasts

This comes as Nike's margins have continued to shrink as investors watch for its direct-to-consumer strategies to pay off.

Earnings per share (EPS) came in at 79 cents, compared to 55 cents expected, driving a net income of $1.2 billion, compared with $1.4 billion, or 87 cents per share, a year earlier. Revenue was also better than forecast, at $12.39 billion versus $11.47 billion expected.

Nike, like other retailers, has been in the process of offloading a glut of inventory brought on by supply chain disruptions and shifting consumer demand that's been weighing on its margins.

(Video Transcript)

Nike shares rise

One of the stocks on the IG platform that rose late in the session yesterday was Nike, the sportswear manufacturer. It rose all-sessions last night after the company beat Wall Street expectations for its fiscal third quarter (Q3) numbers on earnings and revenue, though its margins have continued to shrink as investors watch for its direct to consumer strategies still to pay off.

Let's take a look at the figures. Earnings per share (EPS) came in at $0.79 compared to $0.55 expected, driving a net income of $1.2 billion, compared with $1.4 billion or $0.87 per share this time last year. Revenue was also better than forecast at $12.39 billion against $11.47 billion forecasted.

Meanwhile, Nike, like other retailers, has been in the process of offloading a glut of inventory brought on by supply chain disruptions and shifting consumer demands. And it's been been weighing on its margins. I think overall, the story did produce this rather interesting rise in the stock yesterday.

Share price chart

If you look at the all-sessions stock on the IG platform, you can see that massive spike that we had. And in fact, we even rose above this line of resistance at 13130, which took us at one point yesterday, albeit briefly, to levels not seen since the 22nd of April 2022. Then came some market reality, but we did nonetheless see the stock up 1.2% at the close overall on the session in yesterday's trade.

The chief executive of Nike, John Donahoe, told investors last quarter he believes the company is past its inventory peak. Gross margins are expected to take a hit during the holiday quarter as the company continued liquidation efforts and promotions. But since then things have been improving and this has been the reaction to Nike's announcement late last night. The stock up in the end up 1.2%.