The retail apparel sector is moving today after Nike (NKE) posted weak revenue in its first fiscal quarter.
Nike posted revenue of $11.6 billion, down by 10.4% Y/Y. Direct revenue fell by 13% to $4.7 billion, while wholesale revenue lost 8% Y/Y to $6.4 billion. The firm has already slashed its revenue estimates in the last three months, only to miss analyst expectations. The positive tailwinds from the Olympics should have lifted Nike’s business. Without the Olympics, Nike would have posted even worse results.
McDonald’s (MCD) should re-test 52-week highs after doubling down on its value deal. Recognizing the cash-strapped consumer, the restaurant plans to continue its $5 Meal Deal this quarter. Expect the firm to post strong traffic and comparable sales trends during the summer quarter.
McDonald’s may expand its margins with its new Chicken Big Mac this month. Spicy McNuggets, the Halloween Happy Meal, and the McRib in December are all positive catalysts. The company launched the Big Arch on August 27, 2024.
In the drugstore segment, CVS Health (CVS) is range-bound at $55 - $61. It might break out from here if investors believe in its strategic review. The firm reportedly cut 2,900 in back office staff. It may cut even more while adding to its sales staff at the stores. Still, shareholders may demand that CVS change its CEO.
