Nike Inc (NYSE:NKE) shares edged lower while the broader market was largely flat ahead of the Federal Reserve’s March interest rate decision despite the athletic apparel company’s latest results topping expectations.
After the market closed on Tuesday, the company posted diluted earnings per share of $0.79 on revenue of $12.39 billion, surpassing Wall Street forecasts of diluted earnings per share of $0.55 on revenue of $11.48 billion.
Shares of the company had been trading about 4% higher ahead of the opening bell but a reversal saw shares trading down 1.5% at US$123.78 at noon.
On Nike’s results, TickMill Group market analyst James Harte said, alongside the headline data, investors had been notably buoyed by the news that the company was starting to trim excess inventories.
“Growing inventories level had been a key concern over recent quarters,” he said. “While still 43% highs year-on-year, at $8.9 billion, inventories were down sharply from the prior quarter’s $9.3 billion level.”
Looking ahead Harte noted the company’s optimistic outlook while it carefully monitors consumer confidence.
“Still, Nike forecasts end-of-year growth to hit the high single-digit level, up from the mid-single digit level forecast at the last earnings update,” he said.
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