Nike, Adobe Systems, and GameStop — Weekly News Digest (21–25 March)
What were the quarterly financial results of Nike and Adobe Systems? Why GameStop shares demonstrated such astonishing growth this week? Find all the answers in our weekly news digest.
Nike report: net profit drops
On Monday 21 March, after the closing of the trading session, the world-known maker of sportswear and accessories, Nike, presented its report for Q3, financial 2022.
From December 2021 to February 2022, online sales recorded a 22% increase in total, with the most prominent growth of 33% appearing in North America. Sales in this region, along with general sales, saw a noticeable rise of 9% to $3.88 billion.
However, Nike management did not share a clear report for the current quarter, bearing in mind the military conflict that is complicating the market situation all over Europe, impacting economic activity through growing inflation and supply issues. Analysts predict that the closing of the Black and Azov seas will affect shipments from Asia to Europe and North America. Moreover, there's a new outbreak of COVID-19 in China.
This pessimistic outlook for the coming months held back the growth of Nike Inc. shares (NYSE: NKE) and the good results that were recorded in the report for the previous quarter. On 22 March, the stock quotes rose by just 2.23% to $133.09. For the next two sessions, they continued sliding down 1% to a total of $132.08.
- Revenue — $10.87 billion, +5%, forecast — $10.59 billion.
- EPS — $0.87, -3%, forecast — $0.71.
- Net profit — $1.4 billion, -4%.
Adobe Systems report: profit has almost stopped growing
On Tuesday 22 March, one of the largest software developers, Adobe Systems, presented its report for Q1, financial 2022. The company expects its yearly revenue to reach $4.34 billion.
Moreover, due to excessive inflation, the management announced a revision of its pricing policy: in the coming months, the prices of all company products are very likely to increase.
On 23 March, the following day after the quarterly report and yearly forecast were presented, the share price of Adobe Systems Incorporated (NASDAQ: ADBE) fell abruptly 9.34% to $422.9. Note that the shares of the company had been growing for six sessions in a row.
- Revenue — $4.3 billion, +9.1%, forecast — $4.2 billion.
- EPS — $2.66, +1.9%, forecast — $2.57.
- Net profit — $1.3 billion, +0.4%.
GameStop shares skyrocket
On 22 March, the market heard that the chairman of the GameStop board of directors, Ryan Cohen, had raised his stake in the company to 11.9%. Cohen purchased about 100,000 shares of the video games and gaming accessories retail chain.
This news immediately sent the shares of GameStop Corp. (NYSE: GME) skyrocketing 30.72% to $123.14. On the next day, the shares kept climbing 14.5% more to $141. The stock quotes have been growing for eight sessions in a row to a total of 82.3%.
Nike presented its report for Q3, financial 2022, announcing a decline in the net profit and sharing not-so-optimistic forecasts for the next months. The shares reacted with a modest 2% growth.
The results for December to February were also presented by Adobe Systems. The corporation disappointed investors with a slowdown in net profit growth and the news about the revision of the yearly forecast. This made the shares plunge by almost 10%.
As for GameStop quotes, they demonstrated remarkable growth this week. Over the last three trading sessions, they surged about 52% in total. This is thanks to the news that the head of the board of directors had increased his company ownership.