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Business REPORT

Nike Q3 earnings rise 22 percent

By Prachi Singh

23 Mar 2016

Nike for its fiscal 2016 third quarter ended February 29, 2016 said that strong consumer demand drove revenue growth across the Nike brand portfolio. Diluted earnings per share grew 22 percent, primarily due to revenue growth, a lower effective tax rate and a lower average share count.

“In the third quarter, Nike delivered robust and balanced growth across our expansive, powerful portfolio,” said Mark Parker, President and CEO, Nike, adding, “We grow by serving the athlete personally every day and, as we unveiled last week, through breakthrough innovation that gives us a foundation for growth for years to come.”

Third quarter income statement review

Revenues for Nike rose 8 percent to 8 billion dollars, up 14 percent on a currency neutral basis. Revenues for the Nike brand were 7.6 billion dollars, up 15 percent on a currency neutral basis driven by growth in all geographies and nearly all key categories.

Revenues for Converse were 489 million dollars, down 5 percent on a currency neutral basis, which the company said were mainly driven by a major system go-live that accelerated orders from the fourth quarter to the third quarter in the prior year. Gross margin was 45.9 percent, flat compared to prior year.

Net income increased 20 percent to 950 million dollars, driven by strong revenue growth and a lower effective tax rate, while diluted earnings per share increased 22 percent to 0.55 dollar, reflecting a 2 percent decline in the weighted average diluted common shares outstanding.

Nike said that as of the end of the quarter, worldwide futures orders for Nike brand athletic footwear and apparel scheduled for delivery from March 2016 through July 2016 were 12 percent higher than orders reported for the same period last year. Excluding currency changes, futures orders would have increased 17 percent, it added.