Shares of Nike Inc. dropped by more than 6% last Friday after the company announced earnings for the first quarter of fiscal 2022 that disappointed investors.
The company cited supply chain disruptions which include temporary forced closures of its manufacturing facilities in Vietnam and Indonesia – both countries that are still facing battle of the Covid-19 pandemic.
First quarter earning is not all bad and gloom.
The company reported sales of $12.2 billion and an underlying EPS of $1.16, which is just under the market estimates of between $12.4 billion and $12.6 billion.
The company managed it’s profit margin better in the first quarter due to less incentives given to customers due to higher than expected demand in the marketplace which led to a higher EPS but warned the increasing supply chain disruptions might hurt their margins going forward.
The ongoing disruptions with the manufacturing facilities in Vietnam and Indonesia are also likely to reduce productions over the next few months which likely leads to a lower sales.
The company also guided for next quarter (Q2) to be flat and revised down the overall fiscal year 2022 revenue to be on mid-single digit growth (down from the previous low double-digit) due to inventory and supply chain disruptions.
The company is currently trading at a market cap of $236 billion and a price to earnings valuation of around 44x, not exactly cheap if you compare them across the last 5 years valuation.
From a technical chart perspective, Nike had a gap up when it announced and guided for higher growth in the last Q4’21 earnings.
This gap is now likely to be filled in with sentiments muted for the rest of the year since the company has guided for a much slower growth for the rest of the fiscal year.
For investors who are looking out on this, you may want to watch out the $139 gap level to be filled in in due time.
If you want to be further conservative, you can use the options to look at the $126 strike when the share price has hit the $139 mark. That would be a good level where investors can start going long again.
Nice article
I added to my NKE holdings Friday
Will add more with each 3-5$ drop
This one is more and more getting into the B2C mode from B2B. Few quarters to 200$ by next summer if recovery plays out well
Garudadri
uncle168,
endemic is mass suicide from the beginning faced with a high proportion of elderly when vaccination has little effect on increasing immunity on them.
this is why elderly loves to be vaxed as they have zero side effects as their limited immunity didn’t even response to the mrna vaccine.
the elderly in singapore is pap’s vote bank, if the gov allow a lot of elderly to die in endemic mode, they will no longer be the next gov in ge2025.
the mood of elderly has changed from being grateful to the gov for the vaccine to now being betrayed that cases are in the thousands and many vaxed elderly are dead.
the opposition is capitalising on this lapse by the gov to gain political grounds when one has to ask why didn’t the opposition oppose endemic mode in the beginning?
this proves one thing god help those who help themselves.
depending on the gov is as useless as the vaccine.
i call upon all singaporeans to fend for ourselves and keep our families safe by following the uncle168 ownself help ownself survive pandemic guidelines which is simple and easy to do:
1. turn off bluetooth of trace together to avoid unneccessary qo orders after safe entry or put your tt token in an alum bag which keep things warm.
2. call ambulance only when your 02 level is below 92. self medicate for cough and fever if vaccinated.
3. wfh, taobao and isolation (avoid going out except to exercise & buy food) must be the default forever.
wearing mask and vaccine have very little effect on the virus as it spreads easily as long as you can breath thru your mask and if your are vaccinated 6 months ago, the virus can infect and kill you.
live life as normal as you can, eat a balanced diet and exercise regularly to build a strong natural immunity to fight the virus.
do not listen to the idiot medical experts on radio and tv, they are bull shitting gov narrative that got us to this mess in the first place and give you a lot of emotional stress by loading you with too much information and confusing the public with ever changing protocols.
we will survive if we follow uncle168 survival tips.
the gov is useless.
the opposition is useless.
we must ownself save ownself.
god speed
keeekeekee
uncle168,
the gov wants to open up quickly becaise the sia, 2 casinos and hotels own the local banks a lot of money.
in total is a few 100 billions.
now the gov use shn to save the hotel.
the casino also act blur never talk about the expansion project to extend their license.
gov pump more free money to jiak liao bee ceca pilots doing nothing.
if we cannot open up huge default on sectors related to tourism and mice will cripple the local banks.
the gov have to allow banks to convert these debt to equity to avoid default.
i hope the gov allow 1 vaccinated person to visit their elderly parent once a day for 20 mins in full ppe.
keekeekee