Shares of Nike (NYSE:NKE) gained in after-hours trading after the company reported earnings for its third quarter of Fiscal Year 2023. Earnings per share came in at $0.79, which beat analysts’ consensus estimate of $0.56 per share. Sales increased by 14% year-over-year, with revenue hitting $12.39 billion. This beat analysts’ expectations of $11.48 billion.
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Nike’s direct sales segment made hefty gains, up 17% against this time last year, hitting a total of $5.3 billion. Nike’s digital sales, meanwhile, posted even bigger gains, up 20% against this time last year. Even wholesale revenue was up an extra 12% in a year-over-year comparison.
The only thing that dropped was gross margin, which fell 330 basis points. That was mostly due to higher markdowns to get more customers in the door and reduce standing inventory. This was a crucial step; Nike reported that its inventories were up 16% against this time last year.
Overall, NKE stock has a Moderate Buy consensus rating based on 14 Buys, four Holds, and one Sell assigned in the past three months. The average price target of $134.28 per share implies 6.9% upside potential.
