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CONSUMER CYCLICALS: Nike reports (not local issuer)

CONSUMER CYCLICALS

(-8% in pre-market)

Reported 1Q (3m to August) results o/n;

  • Sales -9% (cc) in-line with consensus and dragged on by DTC (-12%).
  • Margins saw positive trends (gross +120bps) and was not expected by analyst - guidance is not for that to continue.
  • By product; Footwear -14% vs. Apparel -10%
  • By region; NA -11%, EMEA -12%, China -3% (vs. consensus -6%) and APAC+LATAM -2%.

Earnings call;

  • It's saying slight underperformance vs. expectations and indicates it underperformed the market.
  • Q2 guidance is for sales to be down -8-10% and gross margins to contract 150bps. FY guidance is withdrawn as it transitions in a new CEO.
  • China was down -3% - a beat on analyst expectations - but co has "moderated" expectations for the remainder of the year.

Nike CEO announced he was 'retiring' last month. It joined Burberry, Starbucks and Nestle on high-profile ousting's after poor performance.

Equity takes here

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