Nike Earnings Not Enough for Investors

By Chris Lange Updated Jan 13, 3:04AM EST · Published Sep 27, 4:50PM EDT

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Nike, Inc. (NYSE: NKE) reported its fiscal first-quarter financial results after the markets closed on Tuesday. The company said that it had $0.73 in earnings per share (EPS) on $9.1 billion in revenue. There were consensus estimates from Thomson Reuters that called for $0.56 in EPS on $8.87 billion in revenue. The same period from last year had $0.67 in EPS on $8.41 billion in revenue.

As of August 31, worldwide futures orders for Nike Brand athletic footwear and apparel scheduled for delivery from September 2016 through January 2017 totaled $12.3 billion. This was 5% higher than orders reported for the same period last year, and 7% higher on a currency-neutral basis.

During the first quarter, Nike repurchased a total of 19.0 million shares for roughly $1.1 billion as part of its four-year, $12 billion program approved by the board of directors in November 2015. At the end of this quarter, approximately $2.2 billion had been expended in the program.

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On the books, cash and short-term investments totaled $4.8 billion, $621 million lower than last year as growth in net income and proceeds from the issuance of debt in the second quarter of fiscal 2016 were more than offset by share repurchases, investments in working capital and infrastructure, higher dividends, and a reduction in collateral received from counterparties to foreign currency hedging instruments.

Mark Parker, Chairman, President and CEO, commented:

Fueled by an incredible summer of sport, NIKE delivered strong global growth—and led the industry through disruptive innovation. Q1 also showed how we’re amplifying every category through sports style innovation, transforming retail by connecting the digital and physical experience and ushering in a new Era of Personalized Performance – through product, consumer connections and our supply chain. NIKE’s strategic investments in these growth opportunities continue to deliver long-term value to our shareholders.

Shares of Nike closed Tuesday up 1.8% at $55.35, with a consensus analyst price target of $65.05 and a 52-week trading range of $51.48 to $68.19. Following the release of the earnings report, the stock was initially down 4% at $53.00 in the after-hours trading session.

About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.