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Sept. 24, 2021, 7:43 a.m. EDT

Nike is latest company to see expenses rise

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Claudia Assis

Nike Inc. shares tumbled about 5% in premarket trade Friday after the sneaker and apparel maker reported quarterly sales slightly below Wall Street expectations and said wages and overhead expenses took a bigger bite of its revenue.

Nike /zigman2/quotes/203439053/composite NKE +0.80% said it earned $1.9 billion, or $1.16 a share, in the fiscal first quarter, compared with $1.5 billion, or 95 cents a share, in the year-ago period.

Revenue rose 16% to $12.2 billion, from $10.6 billion a year ago. Gross margins also improved, but selling and administrative expenses increased 20% to $3.6 billion, the company said.

That includes “continued investments” in digital marketing to support pandemic-related demand for online sales, and operating overhead expenses that rose 15% mostly due to higher wage-related expenses, the company said.

FactSet consensus called for EPS of $1.12 on sales of $12.5 billion for Nike.

As a percentage of total revenue, selling and administrative expenses rose to 29% of sales in the fiscal first quarter of 2022, from 28% in the fiscal first quarter a year ago.

Inventories were flat at $6.7 billion, Nike said.

“We have the right playbook to navigate macroeconomic dynamics, as we create value through our relentless drive to fuel the future of sport,” Chief Executive John Donahoe said in a statement.

Retailers are struggling to hire and retain workers, with Target Corp. /zigman2/quotes/207799045/composite TGT +0.68% announcing earlier Thursday it would offer more work hours for its employees and providing steadier schedules. Several retailers have also added benefits and perks such as assistance with educational expenses.

Earlier this year, Nike revealed problems with its manufacturing in Vietnam due to the pandemic.

Supply-chain snags and a tight labor market have plagued businesses from aviation to warehousing.

This week, home builders KB Home /zigman2/quotes/206220859/composite KBH +0.61% and Lennar Corp. /zigman2/quotes/202536373/composite LEN -0.91% said industry-wide supply and labor shortages continued to hamper operations, and FedEx Corp. /zigman2/quotes/203047719/composite FDX +0.06% cited difficulties in hiring and supply-chain disruptions.

Nike shares have gained about 13% so far this year, compared with gains of around 19% for the S&P 500 index /zigman2/quotes/210599714/realtime SPX -0.11% .

/zigman2/quotes/203439053/composite
US : U.S.: NYSE
$ 163.48
+1.30 +0.80%
Volume: 5.32M
Oct. 22, 2021 4:00p
P/E Ratio
43.42
Dividend Yield
0.67%
Market Cap
$258.76 billion
Rev. per Employee
$606,999
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/zigman2/quotes/207799045/composite
US : U.S.: NYSE
$ 255.93
+1.72 +0.68%
Volume: 2.21M
Oct. 22, 2021 4:02p
P/E Ratio
20.39
Dividend Yield
1.41%
Market Cap
$124.90 billion
Rev. per Employee
$228,756
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/zigman2/quotes/206220859/composite
US : U.S.: NYSE
$ 41.10
+0.25 +0.61%
Volume: 908,028
Oct. 22, 2021 4:00p
P/E Ratio
7.85
Dividend Yield
1.46%
Market Cap
$3.60 billion
Rev. per Employee
$2.36M
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/zigman2/quotes/202536373/composite
US : U.S.: NYSE
$ 100.50
-0.92 -0.91%
Volume: 2.48M
Oct. 22, 2021 4:00p
P/E Ratio
7.62
Dividend Yield
1.00%
Market Cap
$30.42 billion
Rev. per Employee
$2.37M
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/zigman2/quotes/203047719/composite
US : U.S.: NYSE
$ 232.98
+0.14 +0.06%
Volume: 2.58M
Oct. 22, 2021 4:00p
P/E Ratio
15.35
Dividend Yield
1.29%
Market Cap
$61.89 billion
Rev. per Employee
$289,945
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/zigman2/quotes/210599714/realtime
US : S&P US
4,544.90
-4.88 -0.11%
Volume: 1.82B
Oct. 22, 2021 5:04p
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