NKE - Wall Street Breakfast Podcast: Nike Rises On Profit Beat

2023-09-29 06:47:00 ET

Summary

• Nike's profit beat estimates, causing the stock to rise 8% premarket, but China sales fell short.
• Exelon and its subsidiary ComEd have agreed to pay a $46.2M civil penalty to settle fraud charges.
• Tesla and Chipotle are facing lawsuits from the EEOC for civil rights violations.

Listen below or on the go on Apple Podcasts and Spotify

Nike ( NKE ) rises on profit beat ; China sales miss estimates. (00:23 ) Exelon ( EXC ) to pay $46.2M penalty to settle SEC fraud charges. (01:26 ) Tesla ( TSLA ) and Chipotle ( CMG ) are sued separately by the EEOC for civil rights violations. (02:24 )

This is an abridged transcript of the podcast.

Nike (NYSE: NKE ) is up 8% premarket as profit beat estimates while China sales missed.

Nike’s first fiscal quarter EPS of $0.94 beat the $0.75 average analyst estimate.

Revenue of $12.94B missed the estimate of $12.99B. Greater China revenue of $1.74B missed the average expectation of $1.83B.

Nike managed to winnow down inventory, with a total of $8.7B compared to the estimated $8.84B. Direct sales of $5.4B were up 6% from the year earlier.

CEO John Donahoe said in a statement that the company is “laser-focused on scaling these successes with greater consistency and speed as we continue to integrate and streamline our business."

The company announced dividends of $524M, up 9% from the prior year.

NKE is down 25% year-to-date.

The SEC announced Thursday, Exelon (NASDAQ: EXC ), its Commonwealth Edison subsidiary and a former ComEd CEO were charged with fraud in connection with a multi-year scheme to "corruptly influence and reward" former Illinois House Speaker Michael Madigan.

Exelon ( EXC ) and ComEd agreed to pay a $46.2M civil penalty, while the charges against former CEO Anne Pramaggiore will be litigated.

The agency said ComEd made indirect payments totaling more than $1.3M to Madigan's associates to obtain jobs, subcontracts and monetary payments, all with the intent to influence Madigan regarding legislation favorable to ComEd.

In a deferred prosecution agreement, ComEd acknowledged that Madigan's support of legislation favoring the company resulted in reasonably foreseeable anticipated benefits to ComEd of more than $150M.

The U.S. Equal Employment Opportunity Commission filed a lawsuit against Tesla (NASDAQ: TSLA ) on Thursday for alleged violations of federal law. The electric vehicle maker was accused by the EEOC of tolerating widespread and ongoing racial harassment of its Black employees and by subjecting some of these workers to retaliation for opposing the harassment.

Separately, the EEOC filed a lawsuit against Chipotle Mexican Grill (NYSE: CMG ) on allegations that it violated federal law when a manager at the company’s Lenexa, Kansas location harassed a teen worker for wearing a hijab. Per the lawsuit, the restaurant chain retaliated against her after she complained and the teen was forced to resign because of the discriminatory treatment.

Other headlines to look out for on Seeking Alpha:

House Speaker McCarthy snubs Senate plan to avoid government shutdown

News-heavy Amazon closes at the same exact price three days in a row

Fed Chair Jerome Powell emphasizes education's role in the economy

On our catalyst watch for the day,

• Macau casino stocks will be on watch just ahead of the beginning of the high-traffic Golden Week holiday period and weekend release of the gross gaming revenue report for September.

• Tesla ( TSLA ) will be in the spotlight on the last business day of the quarter as analysts churn out their Q2 deliveries estimates. The consensus estimate currently stands at 463K deliveries for the quarter.

Wall Street's major averages on Thursday ended higher.

The Nasdaq ( COMP.IND ) added 0.83%. The S&P 500 ( SP500 ) gained 0.59%. The Dow ( DJI ) rose 0.35%.

Of the 11 S&P sectors, ten ended in positive territory, led by Communication Services, Materials and Consumer Discretionary.

Now let’s take a look at the markets as of 6 am. Ahead of the opening bell today, Dow, S&P and Nasdaq futures are in the green. The Dow is up 0.4%, the S&P 500 is up 0.5% and the Nasdaq is up 0.7%. Crude oil is up 0.6% at more than $92 a barrel. Bitcoin is down 0.2%.

In the world markets, the FTSE 100 is up 0.8% and the DAX is up 0.9%.

The biggest stock movers for the day premarket: OPKO Health (NASDAQ: OPK ) is up 14% after ModeX Therapeutics won a contract from the Biomedical Advanced Research and Development Authority (BARDA).

On today’s economic calendar, at 9:45am Chicago PMI and at 12:45 pm the Fed’s John Williams was set to deliver remarks and participate in a moderated discussion on the economic outlook and monetary policy at the Long Island Association Regional Economic Briefing. However, that visit has been canceled. Instead his prepared remarks will be posted on the New York Fed’s website at the time his speech would have been delivered.

For further details see: