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Nike (NKE) Down after Results

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Nike, Inc. (NYSE:NKENIKE) shares are down over a percent in morning trade even after the company reported fiscal second quarter profits and revenues that were above analyst forecasts. The company said second quarter revenues increased 15 percent to $5.85 billion, up 16 percent from a year ago. This exceeded the analyst consensus estimate of $5.82 billion.

NIKE Brand revenues rose 16 percent with growth in every geography except Japan and in all key categories. Converse, Hurley, NIKE Golf and Umbro all grew compared to the prior year while Cole Haan was essentially flat to last year.

Gross margins reduced 200 basis points to 43.8 percent due primarily to higher product costs, which more than offset the positive effects of price increases and growing sales. This was wider than the 150 basis points decline that was expected by analysts.


Nike (NKE) said second quarter net income increased 7 percent to $560 million and adjusted earnings per share increased 11 percent to $1.20 from a year ago. This exceeded analyst forecasts by 3 cents a share.

“We had a strong third quarter. Our relentless focus on innovation delivered powerful new products and services for athletes and consumers, and continues to drive value to our shareholders,” said Mark Parker, President and CEO, NIKE, Inc. “The environment remains volatile, but I’m optimistic about the future. We’re starting a great season of major sports events and we have a pipeline full of innovation to fuel growth over the long term.”

“Demand behind the brand is continuing to stand very tall and accelerating a bit more,” Matt Arnold, an analyst at Edward Jones & Co. in Des Peres, Missouri, said in an interview. “The other side of the equation is on the margin,” where higher prices eventually will help improve profit margins.

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edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.


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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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