Nike Climbs On Strong Outlook, But This Small-Cap Is Monday's Big After-Hours Winner

The stock market had a tough day on Monday, although it finished well off its worst levels of the regular trading session. A huge spike higher in bond rates accompanied comments from Federal Reserve chair Jerome Powell concerning the potential effect of the war in Ukraine on the central bank's ability to control inflationary pressures throughout the U.S. economy. The S&P 500 (^GSPC 1.23%) managed to eliminate most of its losses by 4 p.m. ET, but the Dow Jones Industrial Average (^DJI 0.58%) and Nasdaq Composite (^IXIC 2.25%) still suffered modest losses.

Data source: Yahoo! Finance.

After the closing bell, investors in athletic apparel giant Nike (NKE 0.49%) got some good news, as the company's fiscal third-quarter financial results pointed to the potential for a rebound in its business. Yet Nike's gains paled in comparison to those of little-known HireRight Holdings (HRT). Below, you'll get the scoop on each of these companies and what they just told their shareholders.

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Nike does it

Shares of Nike were up more than 6% in after-hours trading as of 5 p.m. ET. The company behind  the swoosh logo reported strong results that restored some confidence in a stock that has taken a big hit in recent months.

Nike's numbers showed the powerful global brand's resiliency even under tough conditions. Revenue was up 5% in the quarter to $10.87 billion, with an 8% year-over-year rise for products under the Nike brand. The Nike Direct segment saw even healthier sales growth of 17% from year-ago levels, driven by 22% gains in its digital business and Nike-owned physical stores showing a 14% top-line boost. Weakness in China and North America weighed on wholesale revenue, but Nike saw solid results in the European market as well as in various parts of Latin America and the Asia-Pacific region.

Nike wasn't able to avoid all of the negative consequences from rising costs and supply chain issues, but it did its best. A 13% rise in selling and administrative expensive weighed on earnings, but higher gross margins stemmed from less reliance on markdowns and better full-price performance. Moreover, net income of $1.40 billion worked out to earnings of $0.87 per share. Even though that was down slightly from $0.90 per share in the year-ago period, Nike's bottom-line figure was better than most had anticipated.

Nike's results show how important it is for companies to maintain pricing power and brand loyalty. Investors like what they've seen, and Nike looks poised to lead a recovery in the months to come.

HireRight gets earnings right too

Doing even better after hours was HireRight, whose shares jumped nearly 15% as of 5 p.m. ET. The Nashville, Tennessee-based specialist in background screening services reported strong fourth-quarter results that pointed to the health of its business amid a strong job market.

HireRight's financials showed considerable improvement. Fourth-quarter revenue of $198.5 million was 32% higher than it was a year ago, and the company reversed a modest loss in the year-earlier period with adjusted net income of $22.7 million. That worked out to $0.32 per share, topping expectations. For the full 2021 year, revenue jumped 35% to $730 million, with adjusted earnings of $1.24 per share.

CEO Guy Abramo was pleased with how HireRight did, and he identified some areas for even further growth. Although the company does most of its business in the U.S., HireRight did more than 15% of its screens on international employees and applicants, and that part of its business is growing at double-digit percentage rates as well. Meanwhile, HireRight hopes to focus on automation in 2022, with the goal of expanding margins even further.

Interestingly, even though HireRight's guidance for $805 million to $820 million in revenue for 2022 would represent a huge slowdown, investors didn't punish the share price of the November 2021 IPO stock. With anticipated adjusted earnings of $1.32 to $1.45 per share, though, it's hard to put HireRight in the same league as larger growth stocks with massive losses.