Nike Conference Call Highlights
Nike Inc (NYSE: NKE) recently reported its second quarter earnings. Shares of the company are down 3 percent.
• Nike revenues increased 15% to $7.4 billion. Gross margin expanded 120 basis points.
• Diluted earnings per share increased 25% to $0.74. And we continued to deliver strong returns, as our ROIC reached 27%.
• Consumers are engaging with technology in new ways.
• Going a little bit deeper on e-commerce, it continues to deliver with growth of 65% for the quarter.
• Today we have tools and resources available to us that would have been unimaginable five years ago, from 3D printers to high-performance knitting machines to advanced textiles, just to name a few.
• On a constant currency basis, NIKE Brand revenue grew 17%.
• All geographies grew in the quarter, as did all categories, except Golf.
• The NIKE Brand DTC revenue increased 30%, driven by all concepts. Notably, our online business continues to be very strong, with 66% growth in the quarter.
• And global futures are up 11%.
• In North America, we delivered another great quarter with Q2 revenue growth of 16%.
• In Greater China, we continue to see the benefits of our strategy to reset the marketplace.
• Q2 revenue growth of 21% reflects our plan to deploy a more consumer-centric distribution strategy.
• Which delivered 13% revenue growth in the quarter, every territory except Mexico and Korea, with five of them growing at a double-digit rate.
• With revenue up 24% in the quarter, we continue to see strong momentum for the NIKE Brand.
• Our DTC business in Western Europe also continues to perform very well, delivering 40% growth in the quarter.
• Second quarter reported revenue for NIKE, Inc. increased 15%. On a currency-neutral basis, revenue increased 18%, as the NIKE Brand grew 17% and Converse increased 24%.
• Also on a currency-neutral basis, NIKE Brand futures orders grew 11%, driven by a 6% increase in average selling price and a 5% increase in units.
• The Q2 effective tax rate was 25.4%.
• For the full year, we expect constant dollar revenue growth in the low double-digits, with reported revenue growth two to three points lower.
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