Nike Earnings: Making a Comeback?

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S&P 500 (NYSE:SPY) component Nike Inc. (NYSE:NKE) reported its results for the second quarter. Nike designs and markets high-quality footwear, apparel, equipment, and accessory products throughout the world.

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Nike Inc. Earnings Cheat Sheet

Results: Net income for the retail-apparel and shoes fell to $384 million ($1.14 per share) vs. $469 million ($1.03 per share) a year earlier. This is a decline of 18.1% from the year-earlier quarter.

Revenue: Rose 4.7% to $6 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Nike Inc. beat the mean analyst estimate of $1 per share. It fell short of the average revenue estimate of $6.51 billion.

Quoting Management: “Our strong second quarter results show that our growth strategies are working, even under challenging macroeconomic conditions,” said Mark Parker, President and CEO, NIKE, Inc. “We have a focused and flexible portfolio that allows us to target the biggest growth opportunities at all levels – brand, category and product. We stay connected with our consumers and that enables us to deliver innovations that excite the marketplace, grow the business and deliver more value to shareholders.”

Key Stats:

Revenue has increased for four quarters in a row. Revenue increased 9.7% to $6.67 billion in the first quarter. The figure rose 12.2% in the fourth quarter of the last fiscal year from the year earlier and climbed 15.1% in the third quarter of the last fiscal year from the year-ago quarter.

For three quarters in a row, the company’s net income has fallen. In the first quarter, net income fell 12.1% from the year earlier, while the figure fell 7.6% in the fourth quarter of the last fiscal year.

The company has beaten estiamtes for two quarters in a row. In the first quarter, it topped expectations with net income of $1.27 versus a mean estimate of net income of $1.12 per share.

Margins rose in the first quarter after falling the quarter before. Gross margin grew 0.2 percentage point from the year-earlier quarter to 42.9%. In the fourth quarter of the last fiscal year, the figure rose 0.8 percentage point to 43.5% from the year earlier quarter.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the third quarter has moved down from $1.41 a share to $1.40 over the last seven days. The average estimate for the fiscal year is $5.24 per share, a rise from $5.14 ninety days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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