NIKE (NKE) Shares Hit New High on Strong First Quarter Earnings
Shares of NIKE, Inc. (NKE) traded up to a fresh high of $125.82 today after the company reported better than anticipated first quarter 2016 earnings after yesterday’s market close. As of this writing, NIKE, Inc. stock was trading at $125.07 per share, up +10.28 or +8.96 percent in Friday’s regular trading session, after having closed at 114.79 yesterday before the earnings announcement.
Founded in 1964, Beaverton, Oregon based NIKE, Inc. is the world's foremost sports and fitness designer, marketer and distributor of athletic footwear, clothing, equipment and accessories.
NIKE, Inc. reported a 5 percent revenue increase in the company’s fiscal first quarter ended August 31st, 2015 to $8.4 billion, which was an increase of +14 percent on a currency neutral basis. NIKE brand currency-neutral revenues increased 15 percent to $7.9 billion, with growth seen in most categories across all geographical markets. Converse showed U.S. - market driven revenues of $555 million, which represents a 3 percent rise on a currency-neutral basis.
NIKE Inc.’s net income reportedly grew 23 percent to $1.2 billion, boosting its diluted earnings per share by 23 percent to $1.34. The company attributed the encouraging results to “strong revenue growth, gross margin expansion, selling and administrative expense leverage, a lower tax rate and a decrease in the weighted average diluted common shares outstanding.”
The company’s gross margin was reported at 47.5 percent, widening by 90 basis points. NIKE attributed the increase to “higher average selling prices and continued growth in the higher margin Direct to Consumer (DTC) business, partially offset by higher product input and warehousing costs.”
NIKE also reported a pre-tax loss of $151 million due to foreign exchange factors, including foreign currency-related profits and losses, as well as foreign currency translation exposures. Overall though, other income was a net $31 million gain, which included these forex related net losses. The company also reported that its overall tax rate was 18.4 percent.
In the company’s earnings press release, Mark Parker, President and CEO of NIKE, Inc. enthusiastically stated that, “Fiscal 2016 is off to a great start”. He continued by saying that, “Our relentless pace of growth is driven by our proven strategy of putting the consumer first, obsessing innovation in everything we do and leveraging our powerful portfolio. We’re well-positioned to continue to deliver long-term growth that is both sustainable and profitable.”
The market and shareholders reacted positively to NIKE’s earnings news, with its stock trading to a new record high of $125.82 after the revenue announcement in today’s trading session. The stock has been trading in a notable uptrend over the past four years, which was further confirmed by today’s new high.
Other News About NKE
Nike Wants to Win Winter With a $185 Hoodie
NIKE worked hard on its winter sportswear line, spending three years to develop a breathable running shirt.
Nike Chairman Philip Knight, Set to Exit, Wants Chief as Successor
Article regarding NIKE founder and chair Philip H. Knight’s plans to step down from those roles and name Mark Parker as his replacement.
Other Stocks in the News
Mobileye shares slide after Citron Research cuts price target
Mobileye N.V. fell after Citron Research reduced its stock price target for the advanced driver assistance system maker to $20, warning it may eventually head to $10 per share.
Apple’s iPhone 6s, 6s Plus hit stores and eager crowds
Apple began delivering preordered iPhone 6s and 6s Plus phones, as well as offering the phones for sale in retail outlets stores around the world.