Companies and Brands

Nike Whiffs on the Top Line Despite Solid Earnings

Wkimedia Commons
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Nike Inc. (NYSE: NKE) reported fiscal third-quarter financial results after the markets closed on Tuesday. The company said it had $0.55 in earnings per share (EPS) on $8.03 billion in revenue, compared to consensus estimates from Thomson Reuters that called for $0.49 in EPS on $8.20 billion in revenue. The same period from last year had $0.45 in EPS on $7.46 billion in revenue.

In this quarter revenues rose 8%, but on a currency neutral basis revenues were actually up as much as 14%. In terms of the brand breakdown, the Nike brand revenues totaled $7.6 billion up 15% on a currency neutral basis, while the Converse brand revenues only totaled $489 million down 5% on a currency neutral basis.

During the third quarter, Nike repurchased a total of 24.3 million shares for roughly $1.5 billion and concluded the previous four-year, $8 billion share repurchase program approved in September 2012. Nike has begun repurchasing shares under its new $12 billion authorization approved in November 2015. So far under this new program about $650 million was used to repurchase shares in the fiscal third quarter.


At the end of the quarter, worldwide futures orders for Nike Brand athletic footwear and apparel scheduled for delivery between March 2016 and July 2016 were 12% higher than orders reported for the same period last year. Excluding currency changes, futures orders would have increased 17%.

Mark Parker, president and CEO of Nike, commented on earnings:

In the third quarter, NIKE delivered robust and balanced growth across our expansive, powerful portfolio. We grow by serving the athlete personally every day and, as we unveiled last week, through breakthrough innovation that gives us a foundation for growth for years to come. Combined with our strategic investments, world-class execution and financial discipline, NIKE consistently delivers value to our shareholders.

On the books, cash, cash equivalents and short-term investments totaled $5.1 billion at the end of the quarter, compared to $5.4 billion in the same period from the previous year.

Shares of Nike closed Tuesday at $64.90, with a consensus analyst price target of $71.24 and a 52-week trading range of $47.25 to $68.19. Following the release of the earnings report, the stock was initially down 4% at $62.29 in the after-hours trading session.

The Average American Is Losing Their Savings Every Day (Sponsor)

If you’re like many Americans and keep your money ‘safe’ in a checking or savings account, think again. The average yield on a savings account is a paltry .4% today, and inflation is much higher. Checking accounts are even worse.

Every day you don’t move to a high-yield savings account that beats inflation, you lose more and more value.

But there is good news. To win qualified customers, some accounts are paying 9-10x this national average. That’s an incredible way to keep your money safe, and get paid at the same time. Our top pick for high yield savings accounts includes other one time cash bonuses, and is FDIC insured.

Click here to see how much more you could be earning on your savings today. It takes just a few minutes and your money could be working for you.

 

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.

AI Portfolio

Discover Our Top AI Stocks

Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.

You can follow him investing $500,000 of his own money on our top AI stocks for free.