KUALA LUMPUR, Aug 20 (Bernama) -- Bursa Malaysia ended higher on Thursday as easing US Treasury yields improved risk appetite following the US Treasury’s announcement of increased buyback operations, an analyst said. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 5.39 points, or 0.31 per cent, to 1,736.71 compared with Wednesday’s close of 1,731.32. The benchmark index opened 0.79 of a point higher at 1,732.11, and fluctuated between 1,732.11 and 1,739.13 throughout the day. On the broader market, losers outpaced gainers 610 to 577, while 610 counters were unchanged, 1,075 untraded and 16 suspended. Turnover increased to 4.28 billion units valued at RM4.01 billion from 3.31 billion units valued at RM2.92 billion on Wednesday. IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said lower yields helped ease pressure on growth stocks, with technology counters benefitting from renewed investor interest.
Nike's new CEO, Elliott Hill, has laid out a bold plan to reposition the iconic brand after reporting second-quarter earnings that beat analyst estimates but revealed declining revenues and profits.
Key Financial Highlights
- Revenue: $12.35 billion (beat analyst estimate of $12.13 billion).
- Earnings Per Share: $0.78 (beat estimate of $0.65).
- Revenue Breakdown:
- Nike Direct: $5 billion, down 13% YoY.
- Nike Brand: $12 billion, down 7% YoY.
CEO's Observations and Strategic Shift
1. Excess Inventory and Promotions
- Hill criticized past strategies, blaming over-reliance on promotions for hurting margins.
- Plan to use Nike Value Stores to clear excess inventory and limit promotions to traditional retail moments.
- "We’ll build back an integrated marketplace across Nike Direct and Wholesale," Hill said.
2. Reinvesting in Brand and Sport
- Acknowledged that Nike shifted away from its core focus on sport, relying too much on "a handful of sportswear silhouettes."
- Plans to reinvest in brand storytelling to inspire and emotionally connect with consumers during major sport moments.
- "We lost our obsession with sport. Moving forward, we will lead with sport and put the athlete at the center of every decision."
3. Rebuilding Wholesale Relationships
- Wholesale revenue: Down 3% YoY to $6.9 billion.
- Hill admitted past neglect of wholesale partners, saying, "We stopped engaging consistently."
- Focus on mutually profitable sell-through to rebuild trust and collaboration.
Challenges Ahead
Guidance for FY 2024
- Revenue Outlook: Expected to decline by low double digits.
- Margins: Projected to contract by 300–350 basis points.
- Increased Expenses: Higher investments in demand creation expected to weigh on Q4 more than Q3.
Regional Sales Declines
- North America: -8%
- Greater China: -8%
- Europe: -7%
- Asia Pacific & Latin America: -3%
Stock Performance and Analyst Sentiment
- Nike shares closed at $77.10, up 0.26% on Thursday, but fell 0.54% in after-hours trading.
- Year-to-date, the stock is down 27.64%.
- Consensus Analyst Rating: "Buy" with a price target of $94.10, implying a 17.81% upside.
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