Nike shares slide on future orders in Q2
- Q2 earnings grows 23% to US$655m
- Gross margin up 120 bps
- Sales increased 15% to $7.4bn
In western Europe, future orders rose 13%, less than an expected 15%
Sporting goods giant Nike has revealed second-quarter earnings that rose faster than revenue thanks to gross margin expansion - but weak growth in future orders hit its share price.
Net income increased 23% to US$655m in the three months to the end of November, reflecting strong revenue growth and gross margin expansion. Earnings per share increased 25% to $0.74, beating analyst expectations of earnings per share of $0.70 cents, according to a consensus estimate from Thomson Reuters.
Gross margin increased 120 basis points to 45.1%, primarily due to a shift in mix to higher margin products, continued growth in the higher-margin direct-to-consumer (DTC) business and a modest benefit from foreign exchange.
Revenues increased 15% to $7.4bn. Nike brand sales were up 17% to $7bn, with growth in every product type, geography and key category, except golf. Revenues for Converse were up 24% to $434m, driven by continuing growth in existing direct distribution markets as well as market conversions in Europe and Asia.
Shares, however, fell 2.1% to $95.08 in after-hours trading as Nike revealed that in its major market of western Europe, future orders rose 13% - lower than an expected 15%.
Mark Parker, CEO of Nike, said: "Our strong second quarter results once again demonstrate Nike is a growth company. The power of our portfolio continues to unlock growth, as we keep a laser focus on our biggest opportunities. The breadth and depth of that portfolio has helped us consistently deliver strong results - quarter after quarter, year after year."
Help test our new apparel sourcing tool.
Instead of our regular roundup of the most-read stories on just-style during the week, we thought a fitting end to the year would be to take a look at the top news stories on just-style in 2015. Free ...
The Zero Discharge of Hazardous Chemicals (ZDHC) group is calling for the development of a single, unified discharge guideline and standardised analytical methods for monitoring wastewater quality in ...
The Better Work programme in Bangladesh is gathering momentum, with 94 factories having joined the initiative since November last year....
The most-read stories on just-style this week include Adidas warning of a significant rise in sourcing costs over the next five years, a look at the US tariff phase-out schedule for textiles and appar...
Nike has filed a lawsuit against Ralph Lauren Corp and the sportswear giant's former design executive Matthew Millward for breaking his non-competition agreement when he took a job with Lauren's Club ...
A group of seven apparel companies, including Levis Strauss & Co, VF Corp and Gap Inc, have signed a declaration calling on government leaders to reach a strong climate change agreement. ...
- China leads US apparel sources with falling prices
- US apparel sector braces for potential cost hikes
- Vietnam grows share of US apparel imports in 2016
- Trade Tracker – Trump's first weeks, Brexit agenda
- Key trade issues facing US textiles and apparel
- Bangladesh "high threat" for terrorist activity
- VF Corp sees Q4 and FY earnings tumble
- Sales at US clothing retailers jumped in January
- Ralph Lauren new execs to support Way Forward Plan
- Adidas and Burberry recognised for sustainability
- When Things Go Wrong - A Practical Guide to Managing Common Problems in Apparel Sourcing
- Outdoor performance apparel 2016: A broader perspective
- Technical textile markets: product developments and innovations, December 2016
- Southeast Asia strategic sourcing review – a focus on Cambodia, Vietnam and Myanmar
- Global market review of lingerie – forecasts to 2022