Post-Earnings Insight and Review - NIKE

LONDON, October 1, 2014 /PRNewswire/ --

Investor-Edge.com has issued free post-earnings study on NIKE Inc. (NYSE: NKE). The company reported its financial results for Q1 FY15 (period ended August 31, 2014) on September 25, 2014. Click on www.investor-edge.com/FreeReports to read our free earnings insight on Nike. During Q1 FY15, NIKE Inc.'s revenues increased 15% Y-o-Y, on both a reported and currency neutral basis, and its diluted EPS rose 27% from the previous year. Our free coverage report can be accessed at:

www.investor-edge.com/register

Earnings Overview  

During Q1 FY15, NIKE Inc.'s revenue increased to $7.98 billion from $6.97 billion in the year ago period. Analysts from Bloomberg were expecting the company to report revenue of $7.78 billion during the reported quarter. Revenues for the NIKE Brand during  Q1 FY15 grew to $7.42 billion from $6.47 billion in Q1 FY14, reflecting an increase of 15% on a currency neutral basis, with growth in every product type, geography and key category, except Action Sports and Golf. Further, the company's revenues from its subsidiary, Converse Inc., increased 16% Y-o-Y on a currency neutral basis to $575 million in Q1 FY15. The revenue increase in Converse was driven by market conversions in Europe and Asia as well as growth in the direct distribution markets of the United States and United Kingdom. The free research on NKE can be downloaded as in PDF format at:

www.Investor-Edge.com/NKEFreeReport

The company's gross margin during the reported quarter improved 170 basis points to 46.60%, primarily due to a shift in the product mix to higher margin products, higher average prices and continued growth in the higher-margin DTC (Direct to Consumer) business. However, NIKE Inc.'s selling and administrative expense increased 21% Y-o-Y to $2.48 billion in Q1 FY15. The company's demand creation expense during the reported quarter increased 23% Y-o-Y to $897 million, primarily on account of marketing investments in the World Cup. Further, NIKE Inc.'s operating overhead expense increased 19% Y-o-Y to $1.58 billion, primarily attributable to higher costs for the expanding DTC business and investments in operational infrastructure. On the other hand, the company's net income for Q1 FY15 broadened to $962 million, or $1.09 per diluted share, from $779 million, or $0.86 per diluted share in the preceding year. NIKE Inc.'s reported quarter's net income outperformed Bloomberg analysts' forecasts of $785 million, or $0.88 per diluted share.

Mark Parker, President and CEO of NIKE Inc., stated, "Fiscal year 2015 is off to a strong start. Our connection to consumers and ability to innovate, combined with our powerful global portfolio, is a complete offense. NIKE has never been better positioned to realize our tremendous growth potential."

For the period ended August 31, 2014, the company's inventories stood at $4.03 billion, compared with $3.52 billion for the same period ended in FY13. However, the company's cash and short-term investments at the end of the reported quarter lowered to $4.58 billion from $5.58 billion at the end of Q1 FY14. Sign up and read the free analyst's notes on NKE at:

www.Investor-Edge.com/NKE-01102014

During Q1 FY15, NIKE Inc. repurchased a total of 10.6 million shares for approximately $819 million as part of its four-year, $8 billion program approved by the company's Board of Directors in September 2012. As of August 31, 2014, the company had repurchased a total of 62.5 million shares under this program for $4.2 billion, an average cost of approximately $67.74 per share.

Stock Performance 

A day after the earnings release, on September 26, 2014, NIKE Inc.'s stock surged 12.23%, ending the session at $89.50. However, the stock edged 0.42% lower on the following trading session, and on the last close, Tuesday, September 30, 2014 the stock recorded a new 52-week high of $90.29, before finishing the day 0.09% higher at $89.20. A total of 5.79 million shares were traded, which was significantly above its three months average volume of 3.63 million shares. Over the previous three trading sessions and over the last one month, the company's shares have gained 11.85% and 13.56%, respectively. Moreover, the stock has gained 13.43% from the beginning of 2014. Shares in NIKE Inc. are trading above their 50-day and 200-day moving averages of $79.54 and $76.46, respectively. Further, the stock traded at a PE ratio of 27.33 and has a Relative Strength Index (RSI) of 74.33. Visit Investor-Edge and access the latest research on NKE at:

www.Investor-Edge.com/NKEEarningsCoverage

In the last one month, NIKE Inc. has reported ten transactions by two insiders on two days. On September 05 and September 26, 2014, Don Blair, Executive Vice President and CFO of NIKE Inc., purchased a total of 182,000 shares of the company, worth $4,540,580 at an average price of $24.95 per share, while he disposed equal number of shares at an average price of $86.64 per share for $15,768,460. In addition, on September 26, 2014, Eric Sprunk, COO of NIKE Inc. bought 66,000 shares of the company, worth $1,445,400 at a price of $21.90 per share, while on the same day he sold equal number of shares for $5,809,980 at a price of $88.03 per share. Complimentary in-depth research on NKE is available at:

www.Investor-Edge.com/NKEInsiderTrading

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