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Friday's Market Minute: That's A Wrap

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Friday's Market Minute: That's A Wrap

Earnings season unofficially came to a close yesterday when Nike Inc (NYSE: NKE) reported its quarterly earnings. The athletic shoe and apparel retailer posted a loss of $0.51 per share on revenues of $6.3 billion. Nike’s numbers missed the Street’s expectations and decreased significantly compared to the same time last year. EPS fell by more than 180 percent, and revenue dropped by 38 percent. Of course, Nike’s report wasn’t a surprise, as we’ve seen COVID-19 decimate other retailers’ incomes over the past few weeks.

With 90 percent of Nike-owned stores closed for eight weeks of the quarter due to the virus, many customers had to shop online. This past quarter, Nike’s digital sales grew by 75 percent year-over-year, making up about 30 percent of all revenue. For context, Nike-brand footwear makes up the bulk of the company’s revenue at around 63 percent.

Lululemon Athletica Inc (NASDAQ: LULU) and Gap Inc’s (NYSE: GPS) Athleta were no different: store closures hampered earnings, and overall revenue fell for all three athletic and athleisurewear retailers, but online sales grew by numbers never before seen. COVID-19 provided a stress test to many companies this quarter, but retailers received some of its worst. Now, we have a few weeks of a break before the bank stocks kick off a new earnings season the week of July 13 which will hopefully begin to explain where the market is headed in a post-COVID world.

 

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