Consumer Products

Why Nike Is Friday's Big Earnings Winner

When Nike Inc. (NYSE: NKE) released its fiscal second-quarter financial results after the markets closed on Thursday, the company said that it had $0.52 in earnings per share (EPS) and $9.37 billion in revenue. That compared with consensus estimates of $0.46 in EPS and $9.17 billion in revenue, as well as the $0.46 per share and $8.55 billion posted in the same period of last year.

In terms of the revenue breakdown, Nike brand revenues increased 14% to $8.9 billion on a currency neutral basis, while revenues from Converse increased 6% to $425 million.

During the second quarter, Nike repurchased a total of 16.1 million shares for roughly $1.3 billion as part of its four-year, $12 billion program.

On the books, Nike’s cash, cash equivalents and short-term investments totaled $4.0 billion at the end of the quarter, $2.3 billion lower than last year as share repurchases, dividends, repayment of notes and investments in infrastructure more than offset net income.

The company offered no guidance for the fiscal third quarter. However, the consensus estimates call for $0.72 in EPS and $9.62 billion in revenue.

Mark Parker, board chair, president and CEO, commented:

NIKE’s ambitious digital transformation is driving strong results and momentum in North America and in our international geographies. We’re incredibly energized about 2019 – with a full innovation pipeline; the most personal, responsive retail experiences in the industry; and a supply chain that’s delivering speed at scale.

Shares of Nike closed Thursday at $67.53, in a 52-week range of $60.13 to $86.04. The consensus analyst price target is $87.06. The stock was up about 8% at $72.88 in early trading indications Friday.