NKE is transitioning as retail struggles, now is not the time to buy.
It is almost impossible to find a large cap name at a decent
price in the stock market these days. That’s because the stock market is now
the second most expensive in history. Nike, Inc. (NYSE:NKE) regrettably doesn’t
break that mold. Still, does NKE stock make sense for the dividend investor. Is the Nike stock dividend safe?
Let’s take a look at its most recent quarterly results,
which are for Q1 of FY18.
Nike stock delivered revenues of $9.1 billion, which was
flat compared to the previous year. About 95% of this revenue was generated
from the Nike brand itself, and the other 5% from Converse, although Converse
revenues were down 16%.
It’s the gross margin numbers that show how tough things are
for retail these days, with a 180 bps decline to 43.7%. Part of this was due to
lousy currency exchange rates, but management said the rest was due to “a
higher mix of off-price sales.” In other words, Nike had to discount to get
product out the door.
No comments:
Post a Comment