Nike's sales rose 7% to $9B for Q3, but the company posted its "first quarterly loss in years" with a net loss of $921M due to a $2B "charge on foreign earnings following the U.S. tax overhaul," according to Sara Germano of the WALL STREET JOURNAL. Pretax income was $1.2B for the three months ending Feb. 28, "down 12% from the year prior." Sales in North America fell 6% to $3.6B, and company execs said that they "expect the region to be roughly flat in the current quarter and to return to sales growth in the quarter that begins in June." Meanwhile, Nike Chair, President & CEO Mark Parker said the company has “a deep leadership bench,” a week after complaints about workplace behavior triggered the departures of Nike Brand President Trevor Edwards and VP & GM of Global Categories Jayme Martin (WALL STREET JOURNAL, 3/23). Parker at the beginning of his conference call said, "I'm committed to ensure that we have an environment where every Nike employee can have a positive experience and reach their full potential." In Portland, Mike Rogoway noted Nike "could be upended" by the $50B in tariffs President Trump has imposed on China. Nike "was silent on trade matters" on Thursday (Portland OREGONIAN, 3/23).
EXIT SIGN: The WALL STREET JOURNAL's David Benoit notes William Ackman’s Pershing Square Capital Management LP "cashed out of its brief holding" in Nike in recent weeks, "for a profit" of around $100M. Ackman "had taken the stake" in Q4, but Pershing Square "intended to keep it as a passive bet on a company it believed was undervalued." Sources said that after the stock "jumped some 32% from Pershing Square’s purchasing costs, it sold the stake." Pershing Square disclosed it "had owned about 5.8 million shares at the end" of '17. The exact size of the stake "couldn’t be determined given the potential for other trading that wasn’t disclosed" (WALL STREET JOURNAL, 3/23).
