Nike Q2 earnings rise 22 percent

Nike reporting its financial results for its fiscal 2016 second quarter ended November 30, 2015 said that strong consumer demand drove revenue growth across the Nike Brand portfolio. Diluted earnings per share grew 22 percent, on the back of gross margin expansion, a lower effective tax rate and a lower average share count.

“Our strong Q2 growth and profitability show that Nike continues to drive real momentum through the Category Offense – by going deep with consumers by sport and serving them completely,” said Mark Parker, President and CEO, Nike, adding, “And our powerful global portfolio of businesses, combined with strong financial discipline, continue to drive significant shareholder value. We see tremendous opportunity ahead as we enter an Olympic and European Championships year with a full pipeline of inspiring innovation for athletes everywhere.”

Second quarter detailed review

Revenues for Nike increased 4 percent to 7.7 billion dollars, up 12 percent on a currency neutral basis. Revenues for the Nike brand were 7.3 billion dollars, up 13 percent on a currency neutral basis, driven by double-digit growth in every geography and most key categories.

Revenues for Converse were 398 million dollars, down 5 percent on a currency neutral basis, as strong growth in North America was more than offset by a decline in Europe.

Gross margin increased 50 basis points to 45.6 percent, primarily due to higher average selling prices, partially offset by higher product input costs and unfavourable changes in foreign exchange rates. Net income increased 20 percent to 785 million dollars, while diluted earnings per share increased to 0.90 dollar, reflecting revenue growth, gross margin expansion, a lower tax rate and a one percent decline in the weighted average diluted common shares outstanding.