How Nike Powered Through Q4
Nike shares rose after it released better-than-expected fiscal fourth-quarter financial results after the markets closed on Thursday.
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When Nike Inc. (NYSE: NKE) released its fiscal fourth-quarter financial results after the markets closed on Thursday, the company said that it had $0.69 in earnings per share (EPS) and $9.79 billion in revenue. Consensus estimates had called for $0.64 in EPS on revenue of $9.39 billion. The same period of last year reportedly had EPS of $0.60 and $8.7 billion in revenue.
Revenues for the Nike brand were up 9% to $9.3 billion, and revenues for the Converse brand fell to $514 million.
During the quarter, gross margin increased 60 basis points to 44.7%, due primarily to higher average selling prices, margin expansion in Nike Direct and favorable full-price sales mix.
Separately, Nike repurchased a total of 23.1 million shares for roughly $1.6 billion as part of the four-year, $12 billion program approved by the board of directors in November 2015. As of May 31, 2018, a total of 149.4 million shares had been repurchased under this program for about $8.7 billion.
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The company did not issue guidance for the fiscal first quarter, but consensus estimates call for $0.64 in EPS and $9.8 billion in revenue.
On the books, Nike’s cash, cash equivalents and short-term investments totaled $5.25 billion at the end of the quarter, down from $6.18 billion in the same period of last year.
Mark Parker, board chair, president and CEO of Nike, commented:
Our new innovation is winning with consumers, driving significant momentum in our international geographies and a return to growth in North America. Fueled by a complete digital transformation of our company end-to-end, this year set the foundation for NIKE’s next wave of long-term, sustainable growth and profitability.
Shares of Nike closed Thursday at $71.70, with a consensus analyst price target of $75.24 and a 52-week range of $50.35 to $75.91. Following the announcement, the stock was up about 9% at $78.82 in early trading indications Friday.
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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.
