Wednesday's Headlines: Nike Picks Up the Pace
Here were the biggest movers in the MyWallSt shortlist yesterday:
Moving Up ⬆️
Trupanion (TRUP) +7.0%
The Trade Desk (TTD) +5.6%
Spotify (SPOT) +4.4%
Cloudflare (NET) +3.2%
Adobe Inc. (ADBE) +2.9%
Moving Down ⬇️
Stitch Fix (SFIX) -9.1%
Tesla, Inc. (TSLA) -8.1%
FactSet (FDS) -5.4%
Sea Limited (SE) -3.8%
Hain Celestial (HAIN) -3.6%
Nike Picks Up the Pace and Soars Premarket 🏃♂️
Nike (NKE) notched a home run last night in its fiscal second-quarter earnings report with better-than-expected results on both the top and bottom line sending its stock soaring. It’s currently up over 12% premarket and still climbing as investors clamber to hop aboard the hype train ahead of a potentially lucrative holiday season.
Nike posted earnings per share (EPS) of $0.85 on revenue of $13.32 billion, significantly outpacing the respective marks of $0.64 and $12.57 expected by Wall Street analysts. These figures also marked an improvement year-over-year, with revenue jumping by a commendable 17%.
One of the key reasons behind this uptick was Nike’s ability to clear its vast swathes of inventory. Many retailers had been left frustrated following the COVID-induced supply chain issues that befouled global markets. This resulted in high levels of inventory as transit became entirely unpredictable. Despite Nike still having its inventories rise by 43% year-over-year, it managed to reduce them by close to $10 billion against the previous quarter.
Nike’s Executive Vice President and Chief Financial Officer, Matthew Friend, gave further hope to shareholders by stating that:
"Consumer demand for NIKE's portfolio of brands continues to drive strong business momentum in a dynamic environment. We remain focused on what we can control, and we are on track to deliver on our operational and financial goals — setting the foundation for sustainable, profitable growth."
Musk Defends Tesla Share Decline 🛡
Elon Musk has been on the defensive after critics blamed his acquisition of Twitter on Tesla’s (TSLA) falling share price. On Tuesday, shares of Tesla sank 8%, reaching a new 52-week low.
Ross Gerber, who has been a long-time fan of the company, tweeted, “Tesla stock price now reflects the value of having no CEO. Great job tesla BOD - Time for a shake up”.
Musk hit back, blaming macroeconomic factors. “As bank savings account interest rates, which are guaranteed, start to approach stock market returns, which are not guaranteed, people will increasingly move their money out of stocks into cash, thus causing stocks to drop,” he tweeted.
Since taking over at Twitter in late October, Musk has faced a number of challenges at the social media company. He began his tenure with a series of harsh layoffs that threatened to leave the company unable to operate after a mass walkout of engineers. It’s understood that the company is currently losing up to $4 million a day.
Meanwhile, Tesla stock has dropped about 59% since Musk announced the acquisition. That’s more than any other major automaker. In China, the company’s Shanghai factory has been forced to shut several times due to lockdown measures, while supply chain issues have slowed production.
Mr. Musk held a poll on Monday asking whether he should remain at the social media company. Twitter users voted that he should step down by 57%. Musk has said that he will abide by the results, but will stay in charge until a suitable replacement is found.
Workday Gets a New Co-CEO 🙋♂️
Workday (WDAY) announced yesterday that it is replacing its co-CEO, Chano Fernandez, with Sequoia Capital’s Carl Eschenbach. Eschenbach will now work alongside founder Aneel Bhusri running the company as co-CEOs.
The move is an act of succession planning, with Bhusri planning to step down from the top job in early 2024. He will move to the role of Executive Chair with Eschenbach taking over as sole CEO. Bhusri is no stranger to sharing power at Workday, having founded the company with David Duffel in 2005, the two acted as co-CEOs from 2009 - 2014 before Duffel stepped down. Fernandez was then promoted to co-CEO in 2020 with the likely intention of succeeding Bhusri, however, that arrangement clearly fell by the wayside.
Eschenbach brings a wealth of tech experience to the role, serving on the boards of Zoom, UiPath, and Snowflake. He is also the ex-President and Operating Chief of VMware. Workday stock fell 2% in after-hours trading on the news. The financial management and human capital management specialist has long been relied upon by enterprises to run much of their operations, acting as a pseudo-operating system for big businesses. However, the company has suffered in 2022 as the market has turned its back on the tech sector. The stock is currently down 35% year-to-date before today’s anticipated dip.