Nike Q1 earnings accelerate 23 percent

Business

Nike Q1 earnings accelerate 23 percent

by Prachi Singh
25 Sep 2015

Diluted earnings per share increased 23 percent at Nike for its first quarter ended August 31, 2015 due to broad-based revenue growth, gross margin expansion, selling and administrative expense leverage, a lower effective tax rate and a lower average share count.

“Fiscal 2016 is off to a great start,” said Mark Parker, President and CEO of Nike, adding, “Our relentless pace of growth is driven by our proven strategy of putting the consumer first, obsessing innovation in everything we do and leveraging our powerful portfolio. We’re well-positioned to continue to deliver long-term growth that is both sustainable and profitable.”

First quarter financial review

Revenues for Nike increased 5 percent to 8.4 billion dollars, up 14 percent on a currency-neutral basis and revenues for the Nike Brand were 7.9 billion dollars, up 15 percent on a currency-neutral basis driven by growth in every geography and nearly every key category.

Revenues for Converse were 555 million dollars, up 3 percent on a currency-neutral basis, mainly driven by strong growth in the United States, partially offset by a decline in the United Kingdom.

Gross margin expanded 90 basis points to 47.5 percent. The increase was primarily attributable to higher average selling prices and continued growth in the higher margin Direct to Consumer (DTC) business, partially offset by higher product input and warehousing costs. Net income increased 23 percent to 1.2 billion dollars while diluted earnings per share increased 23 percent to 1.34 dollars.