Latest news with #NikeInc
Yahoo
4 days ago
- Business
- Yahoo
Here's What You Might Not Know About Nike's Q4 — New Findings Revealed
Nike Inc. turnaround is going to take time, but at least its challenges are understood. That's the conclusion from BMO analyst Simeon Siegel. He has an 'outperform' rating on shares of Nike, with target price of $92. Shares of Nike are currently trading in the $72.50 range. More from WWD Nike Preps for Fall With an Air Force 1 Low Featuring a Removable Leaf Camo Shroud Santoni Defies Luxury Slowdown With Its 50-year-old Value Proposition Tariffs at 30 Percent Would Be a Tipping Point for European Furniture- and Lighting-makers Like every footwear company, tariffs and sourcing disruptions are top of mind at Nike — which has significant exposure globally, but also major negotiating power with factory and supply chain partners. Siegel's check on Nike's fourth-quarter regulatory filing with the Securities and Exchange Commission found that Nike footwear is supplied by 97 factories in 11 countries, versus 96 across 11 countries last year. Vietnam was the largest producer at 51 percent, Indonesia at 28 percent and China at 17 percent. Four footwear manufacturers represented 59 percent of Nike brand footwear production, versus 57 percent last year. In apparel, Nike works with 303 factories in 34 countries, versus 285 across 33 countries last year. Vietnam was the brand's largest apparel supplier at 31 percent, followed by China and Cambodia, each at 15 percent. The top five apparel manufacturers represented 51 percent of Nike brand apparel production. As Nike rebuilds its wholesale business and clears excess inventory, the company has also been refining its pricing strategy. Average selling prices (ASPs) for footwear were down 3 percent for the year, or flat in Q1, down 5 percent in Q2, down 1 percent in Q3, and down an estimated 6 percent in Q4. All selling regions except Greater China posted larger ASP declines in the fourth quarter versus the full year. Apparel ASPs were flat for the year, or up 3 percent in Q1, down 2 percent in Q2, down 1 percent in Q3, and up an estimated 1 percent in Q4. North American and EMEA (Europe, Middle East and Africa) saw ASPs decline for the year (down 1 percent and down 3 percent, respectively), while Greater China and APLA (Asia Pacific and Latin America) grew (up 5 percent and up 2 percent, respectively). Nike's fourth quarter direct-to-consumer (DTC) sales fell 14 percent year-over-year, and its EBIT (earnings before interest and taxes) margin contracted more than 900 basis points. The BMO analyst noted that while foreign exchange rates could have had an impact, it found that North American sales were similar, with DTC dollars also down 14 percent, and the EBIT margin contracting about 550 basis points. Overall, inventory is on the rise, with Nike ending the year up 9 percent year-over-year. That compares with year-ago inventory levels that were down 11 percent. Nike's Converse brand ended the year with inventory down 8 percent. And separately, its Jordan brand's revenue of $7.27 billion for the year was down 16 percent from $8.70 billon in the prior year. Nike on June 26 posted fourth quarter results that saw net income at the Beaverton, Ore.-based firm fall 86 percent to $211 million from $1.5 billion in the year-ago period. Net sales were down 12 percent to $11.1 billion from $12.61 billion. Shares at the time were trading at the $62 range. Nike management also guided first quarter sales above Wall Street's consensus estimate, which Siegel said last month marked the 'first above-Street guide since the fourth quarter of 2023.' He said management noted encouraging signs that included stronger wholesale order books, progress in Nike's classics franchise management, and running momentum. Nike CEO Elliott Hill told investors in the firm's fourth quarter earnings call that the worst is over, noting also that numbers were already showing improvement in running. He said Nike Running grew by 'high single digits' in the quarter, citing also the success of the Vomero 18 shoe, which had already grown into a $100 million franchise following its February launch. Three specialty retailers who spoke with Footwear News confirmed that the Nike Running comeback is real, with the Vomero 18 the top seller. And with the Vomero 18 putting Nike Running back on the map, it will soon be joined by the Vomero Plus and Vomero Premium. And earlier month, Nike made a change at its challenged Converse division, naming 21-year company veteran Aaron Cain to the top post. Cain succeeds current brand CEO Jared Carver. Best of WWD All the Retailers That Nike Left and Then Went Back Mikey Madison's Elegant Red Carpet Shoe Style [PHOTOS] Julia Fox's Sleekest and Boldest Shoe Looks Over the Years [Photos] Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Los Angeles Times
11-07-2025
- Business
- Los Angeles Times
Levi sees revenue growth offsetting most of tariff impact
Levi Strauss & Co. jumped Friday after raising its revenue outlook, with the maker of 501 jeans expecting sales growth to outweigh the effect of President Donald Trump's tariffs. The company said Thursday it now sees revenue rising between 1% and 2% for the current fiscal year — above the average analyst estimate and up from a previous view that sales would decline 1% to 2%. Levi also slightly lowered its guidance for gross margin due to tariffs, which the company factored in as 30% for products imported from China and 10% for the rest of the world. The shares jumped in morning trading in New York. The stock had advanced 14% so far this year through Thursday's close. The results suggest that Levi's efforts to branch into new products and categories — part of what the company calls the 'head-to-toe denim lifestyle' — is paying off. Led by Chief Executive Officer Michelle Gass, Levi has sought to expand its offerings beyond its traditional denim pants, and its lineup now ranges from caps and aprons to backpacks. It's collaborating with Nike Inc. to sell denim Air Max 95 sneakers. Levi is also looking to boost sales through its own stores and website. In a call with analysts Thursday afternoon, Harmit Singh, chief financial and growth officer, attributed the company's strong performance to its 'laser focus' on the core Levi's brand and its direct-to-consumer strategy. 'Our e-commerce business is now a profitable business,' he said. 'It used to be a drag.' Jeans remain at the top of the company's best sellers, but it's making progress selling polo shirts and T-shirts for men, and jackets, dresses and tank tops for women. The company said it has seen a higher sell-through of its full-priced products. 'The brand is resonating with millennials and Gen Z, and growth is accelerating in women's and new categories, fueled by direct-to-consumer and an expanding wholesale business,' said Bloomberg Intelligence senior analyst Mary Ross Gilbert. On one resale platform, the blue sneakers from Levi's collaboration with Nike are already selling for between $339 and $999. The impact of tariffs on profitability, excluding mitigation efforts, is expected to be $25 million to $30 million through the end of the year, Singh told Bloomberg News in an interview. Revenue for the quarter ended June 1 rose 6% to $1.4 billion, beating the average estimate of analysts. On an annual basis, sales grew for a fifth straight quarter, while Wall Street had expected a decline. More than half of Levi's US merchandise needs for the rest of the year have already been imported into the country, Singh said. The company has tried to mitigate the effect of tariffs by making 'targeted' pricing changes, diversifying its supply chain and negotiating with vendors. Earlier this year, Levi was one of the first big apparel companies to report earnings after Trump announced sweeping tariffs on April 2. The company's previous guidance didn't factor in tariffs, but since then, a number of competitors have flagged their expected effects along with general consumer caution. American Eagle Outfitters Inc. pulled its guidance altogether, citing discounting and excess inventory among other issues. Shares of Gap Inc. plunged in late May after the company projected a tariff hit of as much as $300 million. Meier writes for Bloomberg.
Business Times
10-07-2025
- Business
- Business Times
Levi sees revenue growth offsetting most of tariff impact
[NEW YORK] Levi Strauss jumped in late trading after raising its revenue outlook, with the maker of 501 jeans expecting sales growth to outweigh the impact of US President Donald Trump's tariffs. The company now sees revenue up between 1 per cent and 2 per cent for the current fiscal year, above the average analyst estimate and up from a previous view that sales would decline 1 to 2 per cent. Levi also slightly lowered its guidance for gross margin due to tariffs, which the company factored in as 30 per cent for products imported from China and 10 per cent for the rest of the world. The shares jumped 7.5 per cent at 4.40 pm in extended New York trading. The stock has advanced 14 per cent so far this year. The results suggest that Levi's efforts to branch into new products and categories, part of what the company calls the 'head-to-toe denim lifestyle', are paying off. Led by chief executive officer Michelle Gass, Levi has sought to expand its offerings, which include everything from caps to aprons. It's collaborating with Nike Inc. to sell denim Air Max 95 sneakers, while looking to boost sales through its own stores and website. Tariffs' impact on profitability, excluding mitigation efforts, is expected to be US$25 million to US$30 million to the end of the year, Levi's chief financial and growth officer Harmit Singh said. Revenue for the quarter ended Jun 1 rose 6 per cent to US$1.4 billion, beating the average estimate of analysts. On an annual basis, sales grew for a fifth straight quarter, while Wall Street had expected a decline. More than half of Levi's US merchandise needs for the rest of the year have already been imported into the country, Singh added. Earlier this year, Levi was one of the first big apparel companies to report earnings after Trump announced sweeping tariffs on Apr 2. The company's previous guidance did not factor in tariffs, but since then, a number of competitors have flagged the tariffs' impact along with general consumer caution. American Eagle Outfitters pulled its guidance altogether, citing discounting and excess inventory among other issues, while shares of Gap plunged in late May after the company projected a tariff impact of as much as US$300 million. BLOOMBERG
Yahoo
09-07-2025
- Business
- Yahoo
Up Nearly 20% in a Month, Is This Turnaround Dividend Stock Still a Buy in July?
Usually, corporate dividends and high dividends don't make a good combo, as one of the ways companies try to 'turn around' their business is by cutting costs, and at times, this means cutting dividends as they try to lower their cash outflows. Additionally, the reason the company needs to 'turn around' in the first place is that it is not performing well financially, which implies that the dividend might be at risk of being cut or suspended altogether. 2 ETFs Offering Juicy Dividend Yields of 20% or Higher Tired of missing midday reversals? The FREE Barchart Brief newsletter keeps you in the know. Sign up now! However, I believe Nike is one stock that fits into the category of a turnaround dividend stock. The stock has a dividend yield of over 2%, and while that has come down from the 2025 highs amid the nearly 20% rise in NKE shares over the last month, it still looks like a buy. Let's discuss this in perspective, starting with the company's dividend. While some companies have a well-documented dividend policy, Nike does not have a stated policy on payouts. However, it has increased its dividends for 23 consecutive years and appears to be on track to become a Dividend Aristocrat. The company increased its dividends even during the 2008 Global Financial Crisis and the COVID-19 pandemic in 2020. Despite its earnings taking a blow in recent quarters, the company increased its quarterly dividend by 8% to $0.40 in December 2024. The dividends have grown at a compound annual growth rate (CAGR) of 10.3% over the last five years, while the CAGR for the past 10 years is slightly above 11%. That looks like pretty decent growth, and I have no reason to believe that the company will cut its dividend anytime soon. Nike's current dividend yield is around 2.1%, which, while not mouthwatering, is well ahead of the 1.3% that an average S&P 500 Index ($SPX) constituent pays. Meanwhile, while Nike has a healthy dividend yield, the payout should not be the only reason for buying the stock, as it's the bulk of its returns doesn't come from dividends. Nike investors should expect the bulk of their returns from capital appreciation, so it is prudent to look at the stock's forecast. While multiple brokerages, including Goldman Sachs, Piper Sandler, Citigroup, HSBC, Barclays, and Baird, raised Nike's target price following the company's fiscal Q4 2025 earnings last month, the stock trades at almost the mean target price of $76.63. However, the Street-high target price of $120 is 56.8% higher than the July 7 closing price. The stock has a consensus rating of 'Moderate Buy' from the 36 analysts covering the stock, but over the last two weeks, it has earned upgrades from HSBC and Argus. Nike is an iconic brand. However, it has lost some of its sheen due to its relative lack of innovation. Moreover, the company lost out to established brands like Adidas (ADDYY), as well as newer brands like New Balance, Hoka (DECK), and On Running (ONON), as the decision to cut down on wholesale sales backfired and only helped competitors gain shelf space, which eventually ensured a higher share of customer wallets. Nike is reversing some of its policies and has now doubled down on third-party sellers. It has also started selling on Amazon (AMZN) after quitting the e-commerce platform in 2019. Here, it is worth noting that Nike pivoted away from third-party sellers for a reason. Having its own channels gives the company more control and helps better connect with customers. Moreover, the pivot helped Nike expand its gross margins. However, soon enough, the strategy took a toll on Nike's sales as its products were not stocked by many third-party sellers. As Nike starts focusing on third-party sellers, it might not be able to enjoy the kind of margins it did at its peak in early 2022. However, the company now has a two-pronged strategy where it intends to use its direct channel for premium products, which will be higher-margin. The company's turnaround is showing results, and it should soon return to top-line growth with stable margins. Turnaround-related costs have been a headwind for the last couple of quarters, but during the fiscal Q4 2025 earnings call, CFO Matt Friend said that the quarter 'reflected the largest financial impact' from its Win Now turnaround plan. The company expects the pressure on the top line and margins to start moderating, but sees another 75-basis point of margin impact this fiscal year. China, meanwhile, remains a structural headwind for Nike as not only is that market not growing as fast as it once used to, but Chinese consumers have increasingly been preferring domestic brands against U.S. rivals. All said, I believe Nike's turnaround is progressing in the right direction, and the stock might fit into portfolios of dividend investors who crave a mix of both dividend growth and capital appreciation over the medium to long term. On the date of publication, Mohit Oberoi had a position in: NKE, AMZN. All information and data in this article is solely for informational purposes. This article was originally published on
Bloomberg
03-07-2025
- Business
- Bloomberg
Nike Likely to Raise Prices Even More After Vietnam Trade Deal
Nike Inc. will face pressure to raise prices higher than expected after the US and Vietnam reportedly reached a new trade agreement that boosts tariffs, according to an analyst. 'Nike already plans surgical price increases, and we expect this plan to move forward, with potentially higher increases than prior plan,' Raymond James analyst Rick Patel wrote in a research note to clients on July 2.
