How Nike Powered Through Q4

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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.

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.