Wall Street Breakfast

Nike ‘comeback takes time,’ shares drop

Nike (NKE) cuts revenue growth forecasts as macro headwinds to have 'pronounced' impact. (00:27) Biden, Trump go back and forth over inflation at first U.S. presidential debate. (01:47) Equinor (EQNR) comes up dry in first Argentina offshore well. (03:11)

Episode transcripts seekingalpha.com/wsb.

Show links:
Biggest stock movers today: NKE, DJT, and more
Meta may block news content on Facebook in Australia if forced to pay licensing fee
NFL ordered to pay $4.7B after losing Sunday Ticket antitrust trial
Tractor Supply shelves climate, diversity goals after pushback

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Duration:: 6m
Broadcast on:: 28 Jun 2024
Audio Format:: mp3

Welcome to Seeking Alpha's Wall Street Breakfast, where we cover the top news for investors every morning. Good morning! Today is Friday, June 28, the final trading day of the first half of 2024. I'm Julie Morgan. Nike says a comeback takes time. Inflation was, of course, a big topic on the presidential debate stage. An equinure comes up dry in Argentina. Nike shares are down 14% in pre-market action after the company earned an adjusted profit of $1.01 per share, beating street expectations. But reported that revenue was down 2% versus estimates for a 1% gain. Nike's CFO Matthew Friend updated the company's fiscal 25 outlook, saying that they are taking actions to reposition Nike to be more competitive and to drive sustainable, profitable, long-term growth. Nike is faced with the challenge of navigating macro headwinds that will have a pronounced impact on fiscal 2025 and continued softness in China. The company now expects fiscal year 25 sales to be down mid-single digits with sales in the first half of the year, down by high single digits. Nike initially guided for a low single-digit decline in sales for 2025. Gross margin in fiscal year 25 is expected to expand by 10 to 30 basis points. The CFO told analysts that a comeback takes time. Both the CEO and the CFO acknowledged that the lack of innovation, which has plagued the company, especially in the most recent fiscal year, as competitors gained traction in both the fitness and running categories. One of the areas that Nike pledged to reinvigorate is its once legendary running division. The first televised debate between President Joe Biden and former President Donald Trump saw the two sparring over the key topic of inflation. Trump said that he left Biden with an unbelievable situation in terms of the economy when he left office. Biden shot back by saying that Trump's administration had botched the handling of the COVID-19 pandemic, which led to the economy cratering. After those statements, we decided to look at the data from the U.S. Bureau of Labor Statistics. Total non-farm payroll employment was at 142.6 million in December of 2020 at the end of the last full year of Trump's term. Meanwhile, consumer prices for all items rose 1.4 percent from 2019 to 2020. In comparison, total non-farm payroll employment was 157.2 million in December of 2023 at the end of the last full year of Biden's presidency. Consumer prices for all items rose 3.4 percent from 2022 to 2023, as inflation remains elevated due to the upending of supply chains during the COVID pandemic. For investors looking to track the elections through market instruments, we've got a list of politically driven Republican and Democrat ETFs. The list is in the transcript of this podcast. The link to the transcript is in show notes. Equinor said Thursday that his first highly anticipated exploration well drilled in a new frontier basin offshore Argentina showed no indications of oil or natural gas. S&P Global reported that expectations were running high in the local oil industry, pointing to a potential initial production of 200,000 barrels a day. Equinor has a 35 percent stake alongside its two partners, Argentina's state run YPF with 35 percent as well, and Shell with 30 percent. The well was the first to be drilled in the North Argentine basin. I've got a few other articles I'd like to share with you on Seeking Alpha. Meta May block news content on Facebook and Australia if they're forced to pay a licensing fee. The NFL is ordered to pay $4.7 billion after losing the Sunday ticket antitrust trial and tractor supply shelves its climate and diversity goals after pushback. On our catalyst watch for the day, Serkana will release US video game sales results and the reconstitution of the Russell indexes is final after market close. Now for a look at the markets today as of 6 a.m. Dow S&P and NASDAQ futures are in the green. Crude oil is up 1.2 percent at $82 a barrel. Bitcoin is up 0.2 percent at 61,000. In the world markets, the FTSE 100 is up 0.5 percent and the DAX is up 0.6 percent. In Fenera is on our list of the biggest movers of the day pre-market. INFN is up 18 percent after Nokia announced that it would acquire the firm for $2.3 billion. On today's economic calendar at 8.30 a.m. personal income and outlays. The headline number the PCE index is expected to see no change month over month or 2.6 percent year over year according to the consensus. That compares with April 0.3 percent month over month increase in 2.7 percent year over year growth. At 9.45 a.m. Chicago PMI and at 12 p.m. the Feds Michelle Bowman will participate in a discussion at the Ronald Reagan Presidential Foundation and Institute Leadership Council Conference. That's it for today's Wall Street breakfast. Thanks for listening! To take full advantage of seeking alpha with coverage on significant stocks and ETFs, become a premium subscriber. Check out seekingalpha.com/subscriptions. I'm your host Julie Morgan. Go out and make it a great day! [BLANK_AUDIO]