Nike Hits 52-Week High on Solid Q4 Earnings & FY16 View - Analyst Blog
Shares of the athletic apparel, footwear and accessories retailer, Nike Inc. NKE soared to a new 52-week high of $110.34 last Friday, before closing trade a notch lower at $109.71, surging roughly 16.1% year-to-date. The stock’s solid run at the index came after the company’s better-than-expected fourth-quarter fiscal 2015 results, accompanied by an encouraging guidance.
The sports gear giant, reported earnings of 98 cents per share for the fourth quarter, which increased 26% year over year and surpassed the Zacks Consensus Estimate of 84 cents. Results were driven by an impressive top line, improvement in gross margin, lower tax rate and a decline in average share count. In the trailing four quarters, the company’s earnings have outperformed the Zacks Consensus Estimate by an average of 13.1%, including 16.7% in the last concluded quarter.
The company’s top line surged about 5% to $7,779 million and also came ahead of the Zacks Consensus Estimate of $7,746 million on the back of robust demand for its brands and significant growth in its main categories and all of its locations. Sales also jumped 13% on a currency neutral basis.
Going forward, Nike remains optimistic about fiscal 2016 as it expects the strong fiscal 2015 momentum to continue. The company anticipates revenue growth in the mid-single-digit range for fiscal 2016, while constant dollar revenues are expected to increase in the low-double-digits range. Moreover, revenue growth for the first quarter of fiscal 2016 is projected in the low single-digit range.
The company’s solid quarterly performance reflects its focus on adopting innovations to keep up with customer demand. In spite of foreign currency headwinds, this Zacks Rank #3 (Hold) company’s results remain impressive, backed by its constant focus on exploiting growth opportunities along with efficient risk management.
Coming to Nike’s global expansion efforts, the company has acquired renowned brands such as Converse, Hurley and others over the years, in an attempt to solidify its global footprint. Further, it remains committed to develop a direct-to-consumer business model, which is a major growth driver.
Nike also boasts of a robust balance sheet, which offers it the financial flexibility to drive future growth. Further, the company remains committed toward enhancing shareholder returns, as evident from its regular practice of returning value to shareholders in the form of share repurchases and dividends.
Apart from Nike, Carter's Inc. CRI, Boot Barn Holdings, Inc. BOOT and Foot Locker, Inc. FL also hit 52-week highs of $109.30, $31.59 and $67.79, respectively, on Jun 26, 2015.
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