Breakfast News: Nike Dives 10% On Results
Major shifts unfolded this week across tech, retail, and logistics sectors. TikTok’s U.S. operations will soon operate under a new ownership structure, while FedEx announced plans to split its freight division. Meanwhile, disappointing earnings reports from Nike and KB Home sent shares tumbling and raised concerns about market challenges ahead.
TikTok’s U.S. business is restructuring its ownership to address regulatory pressures. A group of investors—including Oracle, Silver Lake, and MGX—will collectively hold a 50% stake in the newly formed TikTok USDS Joint Venture LLC. ByteDance, the app’s Chinese parent company, will retain 20%. Oracle will also act as a security partner, overseeing data protection for U.S. users. The venture’s board will be majority-American, reflecting efforts to distance operations from foreign influence.
FedEx revealed plans to spin off FedEx Freight as an independent, publicly traded company by June 1, 2026. The move follows a 19% year-over-year rise in earnings per share (EPS), despite setbacks like the grounding of its MD-11 aircraft fleet. The separation aims to streamline operations and unlock value for shareholders.
Elsewhere, earnings reports highlighted ongoing struggles in retail and housing. Nike’s stock plunged over 10% in pre-market trading after its EPS dropped 32% year-over-year. Revenue in Greater China fell 17%, blamed on higher tariffs and excess inventory. Similarly, KB Home reported a 16% decline in Q4 revenue and a 24% drop in adjusted EPS, citing affordability issues for homebuyers. The company now forecasts fiscal 2026 revenue between $1.05 billion and $1.15 billion.
The changes at TikTok and FedEx signal strategic shifts to adapt to regulatory and operational demands. For Nike and KB Home, weak financial results underscore persistent challenges in key markets. Investors will be watching closely to see whether these adjustments stabilise performance in the coming months.
