Trending tickers: Nike, Mercedes-Benz, FedEx and Investec
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Nike (NKE)
Nike stock jumped overnight as the sports apparel company said CEO John Donahue was stepping down, with longtime company veteran Elliott Hill taking over.
Nike’s stock rose 8% during pre-market trading as investors welcomed the announcement after clamouring for changes at the company. Nike’s stock has dropped 24% so far this year.
Nike’s board of directors on Thursday said Hill, a Nike veteran who previously served as president of consumer marketplace before retiring in 2020, will return to take the top job effective 14 October.
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Donahoe said: “It became clear now was the time to make a leadership change, and Elliott is the right person”.
The company’s sales were flat last quarter and the retailer predicted sales would drop another 10% next quarter as Nike’s classic brands slow down. Nike has been criticised by analysts for a lack of innovative new sneakers.
Mercedes-Benz (MBG.DE)
Mercedes-Benz revised down its full-year profit outlook for the second time in under two months, following a continued slump in sales volumes in China, the world’s largest car market. The German luxury carmaker cited ongoing weakness in Chinese demand for premium vehicles for the adjustment.
"The downgrade comes amid further deterioration of the macroeconomic environment, mainly in China. GDP growth in China lost further momentum amid weaker consumption as well as the continued downturn in the real estate sector," Mercedes-Benz said in a statement.
The latest downgrade reflects deepening concerns about the broader Chinese economy, where slowing GDP growth, weaker consumer spending, and a persistent downturn in the property sector have taken a toll on the luxury car market. Mercedes-Benz had previously cut its profit margin forecast in July but has now been forced to further revise its projections.
Shares of the company, which are listed in Frankfurt, dropped 3% following the announcement.
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In light of these challenges, the Stuttgart-based company has adjusted its 2024 outlook for both its cars division and the broader Mercedes-Benz Group. The automaker now anticipates an adjusted return on sales for Mercedes-Benz cars in the range of 7.5% to 8.5%, down from its prior estimate of 10% to 11%. This signals an expected return on sales of around 6% for the second half of the year.
As a consequence of the reduced sales expectations, Mercedes-Benz Group’s earnings before interest and taxes (EBIT) are projected to fall significantly below last year’s level. Free cash flow for the industrial business is also forecasted to be considerably lower than in 2023.