Shares of Nike (NYSE: NKE) are down 52% since hitting an all-time high toward the end of last year. Weak results from major retailers meant investors had low expectations entering Nike's latest quarterly report, but the swoosh still failed to deliver. Let's see why and what investors should make of it.
Nike reported decent revenue growth for the quarter, but economic headwinds are presenting problems. Profits fell as inflationary costs in transportation and higher reliance on promotional sales and markdowns weighed on margins. The stock tumbled to new lows following the report.
Nike is a fantastic brand. It has one of the world's most iconic logos, and the near-term uncertainty in the economy means investors can buy the stock at a cheaper valuation of 30 times this year's consensus earnings estimate, which is down from over 40 earlier this year.
Source Fool.com