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Nike earnings and sales beat estimates as retailer books record revenue in North America

Nike on Thursday reported fiscal fourth-quarter earnings and sales that topped analysts’ estimates, fueled by record revenue in North America.

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A man walks in front of Nike products exhibit, on February 22, 2021 in New York City.

John Smith | Corbis News | Getty Images

Nike on Thursday reported fiscal fourth-quarter earnings and sales that topped analysts’ estimates, fueled by record revenue in its largest market, North America.

It also offered a better-than-expected sales outlook for the upcoming year, driven by optimism around its women’s category, apparel business and Jordan brand.

Nike continues to benefit from consumers seeking out comfortable clothing to wear for workouts but also around the house. Even as people return to schools, offices and other social settings, many are still searching for relaxed options such as sneakers and stretchy pants.

Nike also saw a boost to its wholesale business — something that was largely inactive a year earlier during the Covid pandemic, when shopping malls and department stores had to temporarily shut their doors and put orders for merchandise on pause. Some of Nike’s key wholesale partners include Dick’s Sporting Goods, Foot Locker and JD Sports.

Nike shares jumped more than 12% in after-hours trading.

Here’s how the company did during its fiscal fourth quarter, compared with what analysts were anticipating, using Refinitiv estimates:

  • Earnings per share: 93 cents vs. 51 cents expected
  • Revenue: $12.34 billion vs. $11.01 billion expected

Nike’s net income for the period ended May 31 rose to $1.5 billion, or 93 cents per share, compared with a loss of $790 million, or 51 cents per share, a year earlier. That topped analysts’ forecast of 51 cents per share, using Refinitiv data.

Total revenue rose to $12.34 billion from $6.31 billion a year earlier, topping estimates for $11.01 billion. Sales were aided by the company selling more goods at full price and relying less on markdowns.

In North America, Nike’s biggest market, sales more than doubled to a record $5.38 billion as the company surged from a year earlier when the Covid pandemic was hitting the retail industry the hardest. The region’s sales were up 29% on a two-year basis.

In Greater China, sales were up just 17% at $1.93 billion. Though China is typically one of the fastest-growing markets for Nike, consumers in China have threatened a boycott after some Western brands including Nike expressed concern about allegations of forced labor in Xinjiang.

Management said Thursday that Nike is seeing improvement in China sequentially month by month.

“Building on our 40-year history in Greater China, we continue to invest in serving consumers with the best products Nike has to offer in locally relevant ways,” CFO Matt Friend said during a post-earnings conference call.

Digital sales were up 41% compared with the prior year and rose 147% compared with the same period in 2019.

The company said its membership model is helping to fuel its e-commerce business. Online purchases from Nike members, who receive first access to exclusive products and other perks, hit a record $3 billion during the fourth quarter. Nike said it now has more than 300 million members globally.

“Fueled by our momentum, we continue to invest in innovation and our digital leadership to set the foundation for Nike’s long-term growth,” said Nike CEO John Donahoe.

In fiscal 2022, Nike is expecting revenue to grow a low double-digit percentage, surpassing $50 billion. Analysts were looking for annual revenue of $48.5 billion.

The company anticipates the first half of the year to grow faster than the second half, Friend said.

“It’s important to note as we normalize our post-pandemic business and continue to reshape the marketplace, we do not expect quarter-by-quarter growth to be linear,” he said.

Nike also anticipates supply chain delays and higher logistics costs will persist throughout much of fiscal 2022. The headaches have been plaguing much of the retail industry for months now. A shortage of containers and a dearth of truck drivers, among other factors, have stalled merchandise from getting from ports to warehouses to shoppers’ homes.

Nike shares are down more than 5% year to date. The company has a market cap of $211 billion.

Find the full earnings press release from Nike here.

Nike continues to benefit from consumers seeking out comfortable clothing to wear for workouts but also around the house. Even as people return to schools, offices and other social settings, many are still searching for relaxed options such as sneakers and stretchy pants.

Source: https://www.cnbc.com/2021/06/24/nike-nke-q4-2021-earnings.html

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Stitch Fix shares surge as online styling service reports surprise profit

Stitch Fix shares jumped after the online shopping and styling service reported a surprise profit for its fiscal fourth quarter.

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The Stitch Fix application for download in the Apple App Store on a smartphone arranged in Hastings-on-Hudson, New York, U.S., on Saturday, June 5, 2021. Stitch Fix Inc. is scheduled to release earning on June 7.

Tiffany Hagler-Geard | Bloomberg | Getty Images

Stitch Fix shares jumped 14% in extended trading Tuesday after the online shopping and styling service reported a surprise profit for its fiscal fourth quarter.

Sales for the three-month period ended July 31 also came in higher than analysts were expecting, thanks to outsized growth in Stitch Fix’s women’s and kids’ categories. Menswear has been growing more slowly, the company said.

Consumers have been splurging on new outfits in recent months, as many head back to school and return to social gatherings. Some have also citied the need for new clothes after either gaining or losing weight during the Covid pandemic.

Here’s how Stitch Fix did compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

  • Earnings per share: 19 cents vs. a loss of 13 cents expected
  • Revenue: $571.2 million vs. $548 million expected

Net income attributable to shareholders was $28 million, or 19 cents per share, in the latest period. A year ago, it posted a net loss of $44.5 million, or 44 cents a share. Analysts had been looking for the company to book a loss of 13 cents per share.

Revenue grew to $571.2 million from $443.4 million a year earlier. That was better than analysts’ expectations for $548 million.

Stitch Fix reported nearly 4.2 million active clients, up 18% from a year earlier. The company said net revenue per active client was $505, surpassing the $500 threshold for the first time ever. Customers have been purchasing more items to keep at home, Stitch Fix said, as they have more brands and price points to choose from.

Stitch Fix defines active clients as people who either ordered a “Fix” subscription or bought an item directly from its website in the preceding 52 weeks from the final day of the quarter.

The company also said it had its lowest ever churn rate at the end of the period, meaning its customers are sticking around.

Last month, Stitch Fix finally opened up its direct-buy option, which is now known as “Freestyle,” to the public. This allows people to shop Stitch Fix for individual items of clothing, without needing to sign up for a subscription.

CEO Elizabeth Spaulding said this should help Stitch Fix grow its addressable market in the year ahead. The company’s next initiative will be to market and raise broader awareness around the offering, she said. Stitch Fix is preparing to roll out a national advertising campaign on the debut.

Early indications are that “Freestyle” is meaningfully accretive to the company’s revenue per active client metric, Spaulding told analysts on a conference call.

“Clients have agency, flexibility and choice while also experiencing a highly personalized shopping experience,” Spaulding said.

For its fiscal first quarter, Stitch Fix said it sees sales in a range of $560 million to $575 million. That’s below analysts’ expectations for $588 million.

For the upcoming fiscal year, Stitch Fix anticipates sales rising 15% or more from the prior year. Analysts polled by Refinitiv had been looking for an 18% increase.

While the entire retail industry is working through supply chain complications, Stitch Fix said it is seeing a small impact, but nothing that will hurt the business in the fall and winter months. The company said it is less reliant on Vietnam, where manufacturing has largely come to a standstill due to ongoing pandemic lockdowns in the region.

As of Tuesday’s market close, Stitch Fix shares have fallen nearly 39% this year. The company has a market cap of $3.8 billion.

Find the full press release from Stitch Fix here.

Sales for the three-month period ended July 31 also came in higher than analysts were expecting, thanks to outsized growth in Stitch Fix’s women’s and kids’ categories. Menswear has been growing more slowly, the company said.

Source: https://www.cnbc.com/2021/09/21/stitch-fix-sfix-q4-2021-earnings.html

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International: Top News And Analysis

CNBC International is the world leader for news on business, technology, China, trade, oil prices, the Middle East and markets.

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