Nike Q3 earnings jump 24 percent

Nike said that consumer demand in all geographies drove revenue growth across the Nike brand portfolio in the third quarter. The company added that diluted earnings per share were up 24 percent and grew faster than revenue, primarily due to selling and administrative expense leverage, higher other net income, a lower effective tax rate and a lower average share count.

“The power of Nike’s diverse, global portfolio delivered another solid quarter of growth and profitability,” said Mark Parker, Chairman, President and CEO, Nike in a media statement, adding, “To expand our leadership and ignite Nike’s next phase of growth, we’re delivering a relentless flow of innovation through performance and style, increasing speed throughout the business and creating more direct connections with consumers leveraging digital and membership.”

Third quarter revenues up 5 percent

Revenues for Nike increased 5 percent to 8.4 billion dollars, up 7 percent on a currency-neutral basis. Revenues for the Nike brand were 7.9 billion dollars, up 7 percent on a currency-neutral basis, driven by double-digit growth in Western Europe, Greater China and the emerging markets as well as the sportswear and Jordan brand categories. Revenues for Converse were 498 million dollars, up 3 percent on a currency-neutral basis, driven by growth in North America.

The company said, gross margin contracted 140 basis points to 44.5 percent, as higher average selling prices were more than offset by higher product costs, unfavourable changes in foreign exchange rates and the impact of higher off-price sales. Net income increased 20 percent to 1.1 billion dollars and diluted earnings per share increased 24 percent to 0.68 dollar.

At February 28, 2017 inventories for Nike were 4.9 billion dollars, up 7 percent compared to the prior year as a 3 percent decrease in Nike brand wholesale unit inventories was offset by increases in average product costs per unit and higher inventories associated with growth in DTC.

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