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Nike, Cintas Impress in Q1, Jimmy John's Hunt Over

Wednesday, September 25, 2019

With no major economic data ahead of the opening bell this morning, and no S&P 500 companies reporting earnings in the early hours, investors look toward current events for buy or sell signals in the stock market. Unfortunately, with new narratives regarding the U.S. House of Representative’s vote on impeaching President Trump and pressure continuing for companies selling nicotine-based vaping products, there are not a lot of good takeaways at this hour.

Last night, however, Nike NKE put up a big beat on both top and bottom lines — 86 cents per share routed the 71 cents in the Zacks consensus, up 28% from a year ago, and $10.66 billion in revenues, +7% year over year and above the $10.45 billion expected — helping boost this company from its current Zacks Rank #4 (Sell) recommendation from before the release. Questions were rife whether last quarter’s miss — the first in at least five years — was a sign of things to come, or merely an aberration.

Nike posted growth of 4% in North America, +6% in Europe, Middle East & Africa (EMEA) and +22% in greater China. This last read is key, as the U.S.-China trade war enters its second year. Shares are up more than 5% in today’s pre-market, and now represent 22.5% gains year to date. For more on NKE’s earnings, click here.

Uniform manufacturer Cintas CTAS, a Zacks Rank #3 (Hold)-rated company ahead of the bell, largely on valuation concerns, also knocked the cover off the ball in its fiscal Q1 earnings report: $2.32 per share easily beat the $2.14 expected, on $1.811 billion that topped the $1.785 billion expected and rose 6.7% year over year. Shares had been up more than 50% year to date, and have grown another 3% in today’s pre-market. For more on CTAS’ earnings, click here.

Jimmy John’s Hunted, Captured

Inspire Brands — the restaurant company controlling big names like Arby’s, Buffalo Wild Wings, Sonic Drive-Thru and others — has bought Midwestern sandwich chain Jimmy John’s for an undisclosed amount. Roark Capital, a private equity company had bought a majority stake in Jimmy John’s three years ago, had valued Jimmy John’s at $2.3 billion. The Atlanta-based Inspire now takes on a company with 2800 locations in 43 states.

Mark Vickery
Senior Editor

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