Biggest stock movers Wednesday: NKE, LW, and more

Stock futures dipped in Wednesday’s premarket as escalating tensions in the Middle East continued to weigh on investor sentiment, following a sharp decline in the previous session.

Biggest stock losers

• Nike (NKE) shares fell more than 5% following a mixed FQ1 earnings report and the withdrawal of its full-year guidance. The company also postponed its investor day, originally scheduled for November, ahead of its CEO transition, with Elliott Hill set to take over on October 14. Nike missed revenue expectations as it worked to address product assortment issues and revamp its innovation strategy. Footwear sales declined by 10%, apparel sales dropped 9%, while equipment sales grew 15%. Direct-to-consumer revenue of $4.7B surpassed the consensus of $4.58B but fell 13% Y/Y, and wholesale sales decreased 8% to $6.4B, below the $6.56B estimate. Converse sales fell 15% to $501M, missing the $523M forecast. Regionally, North American footwear sales were down 14%, apparel dropped 10%, and equipment sales rose 34%. In China, footwear sales were softer but performed better than expected, while apparel sales declined more than forecasted.
• Lamb Weston (LW) shares dropped nearly 4% after it exceeded FQ1 expectations but revised down its FY2024 outlook and introduced a cost-saving restructuring plan. The company will reduce its global workforce by 4%, close an aging plant in Connell, Washington, and temporarily halt certain production lines in North America. These actions will incur pre-tax charges of $200M-$250M in FY2025 and reduce capital expenditures by $100M while saving $55M. As a result, the company lowered its full-year non-GAAP net income forecast to $600M-$615M, or adjusted EPS of $4.15-$4.35, with a midpoint of $4.25, down from the previous $4.48 estimate. Despite this, the company maintained its revenue outlook of $6.6B-$6.8B, with a midpoint of $6.7B, slightly ahead of the $6.6B consensus.
• Resources Connection (RGP) shares lost about 4% after reporting disappointing FQ1 results, missing the consensus mark. Revenue declined approximately 20% Y/Y due to ongoing weak demand influenced by broader economic conditions. Billable hours fell by 15.3%, and the average bill rate dropped 5.0% (4.7% on a constant currency basis) compared to the same quarter last year. Gross margin contracted by 290 basis points to 36.5%, while adjusted EBITDA came in at $2.3M (an adjusted EBITDA margin of 1.7%), significantly down from $11.5M (an adjusted EBITDA margin of 6.8%) in the prior year.