Nike $NKE reported better than expected second quarter earnings after the close Thursday. However despite beating expectations with stronger international sales Nike still struggles in a saturated America.
Nike $NKE reported better than expected earnings after the close on Thursday. However despite beating expectations with stronger international sales Nike still struggles in a saturated America.
Earnings : EPS $0.46 on revenue of $8.55 billion beating forecast consenus EPS $0.40 on revenue of $8.39 billion. Net income is down 9% year over year from a decline in gross margin and a higher selling and administrative expenses. Revenue however was up 5%.
Nike Inc NYSE: NKE · After Hours 63.53▼ 1.24 (-1.91%)
- Nike expects U.S. tax reform to have a long-term net favorable impact on earnings.
- International business now represents over 55% of revenue
- Nike expects non-domestic growth will contribute 75% of incremental growth over the next five years.
- Revenue in Greater China (Nike’s third-largest market after North America and Europe, the Middle East and Africa) grew 16% in the quarter and totaling $1.2 billion. Nike’s divisional revenues in Europe, the Middle East & Africa grew by 19% to $2.1 billion.
- Nike’s full-year guidance remains consistent with the guidance provided last quarter, $NKE expects a gross margin contraction between 50 and 100 basis points due to the challenging U.S. retail environment and reported revenue growth in the mid-single-digit range.
- The NikePlus app’s reserve-for-you feature is converting sales at a rate that’s 40 times more effective than traditional outreach.
- Nike CFO Andy Campion said Nike is now seeing early stages of stabilization in a consolidating American wholesale marketplace. He expects an inflection point to occur through the end of the fiscal year, which would position Nike for North American growth in fiscal-year 2019.
Source: Nike, AlphaStreet
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