Sneaker giant Nike (NKE) has reported quarterly financial results that surpassed Wall Street forecasts.
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The Beaverton, Oregon-based company announced fiscal third-quarter earnings per share of $0.35, which was ahead of the $0.28 forecast among analysts. Revenue in the period totaled $11.28 billion, which topped the $11.24 billion expected on Wall Street.
The athletic apparel maker said that it continues to execute its turnaround plan under CEO Elliott Hill. About a year and a half into his tenure, Hill has managed to repair parts of Nike’s struggling business, but has been clear that it’ll take time for the entire company to improve given the scale and complexity of the changes that are required.
Nike’s revenue by geography. Source: The Fly
Nike’s China Problem
Nike’s latest financial results were powered by strong North American sales. Sales in the U.S. and Canada largely offset a hit from tariffs and a continuing sales decline in China, Nike’s second largest market. Nike has seen its sales across China decline amid a backlash against U.S. brands.
In North America, Nike’s revenue climbed 3% to $5.03 billion in fiscal Q3. However, sales in Greater China fell 7% to $1.62 billion during the quarter. Despite the decline, Nike’s latest China revenue beat Wall Street estimates that called for $1.50 billion.
Is NKE Stock a Buy?
Nike’s stock has a consensus Moderate Buy rating among 20 Wall Street analysts. That rating is based on 14 Buy and six Hold recommendations issued in the last three months. The average NKE price target of $73.33 implies nearly 40% upside from current levels. These ratings might change after Nike’s financial results.
