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Nike (NKE) Earnings Review

Earnings Review First Quarter of Fiscal Year 2014 (10FY14) Investors bid Nike shares up over 6.5% in a single trading session after the company announced earnings for 1QFY14 (ended August 31, 2013) that beat analysts' estimates. The company earned $0.86 per share in 1QFY14, while analysts were expecting EPS of $0.78. Nike's exceptional performance can be attributed mainly to the growing success of its footwear brands. Con- verse, one of Nike's most famous brands, saw revenues grow 16%, if the effect of exchange rate fluctuation is eliminated, following higher sales in the UK, North America and China. In the quarter, Nike's gross margins expanded 1.20 percentage points over the comparable year-ago period due to lower raw material costs, higher average pricing, lower discounts, growth in the company's direct to consumer businesses, and growth in sales of its Converse-branded products. Analyst Estimates for 1QFY14 Reported 1QFY14 Results YoY Change in 1QFY14 Revenues $6.95 bn $6.97 bn 8% EPS $0.78 $0.86 37% Operating Income $1.08 bn 43.5% Net Income $0.78 bn 37.6% Gross Margins 44.9% 120 bps Review by Segment Revenues grew by 9% Basketball, Running and Men's Training categories contributed the most towards the growth. North America Revenues grew by 11% Western EuroOpe The growth was impressive, given the weakness in the region's economy Central & Eastern Revenues grew by 12% Europe Higher sales in Russia, Turkey and Poland contributed the most to growth Revenues declined by 1% Lower spending on marketing led to a decline in demand Greater China Revenues declined by 20% Revenues actually grew by 1% on a currency neutral basis, with a significant contribution from the football and basketball categories. However, exchange rate fluctuations caused a negative impact of 21 percentage points on overall growth Japan Revenues increased by 1% Revenues actually increased by 5% on a currency neutral basis, with significant contributions from Brazil and Argentina. However, strong growth in these two countries was partially offset by weakness in Korea and Mexico, where shipping delays affected revenues Emerging Markets Revenues increased by 18% Major growth in revenues is attributable to rising demand in the US and UK, and improved pricing of products Converse Sources: Compandy data, Sell-side estimates SOURCES: Company Data, SEC filings, Bloomberg Professional Services BIDNESS Etc. DISCLAIMER: Bidness Etc(TM) and related marks are owned by Bidness Etc. Any other trademarks appearing on this website are the property of their respective owners, and are not used to indicate the origin of goods or services offered or provided by Bidness Etc herein or to suggest approval for or affiliation with Bidness Etc.

Nike (NKE) Earnings Review

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Nike’s stock price was up 6.1% following the beat to consensus estimates. The company’s exceptional performance can be attributed mainly to the growing success of its footwear brands. Its gross ma...

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