Nike Beats Analyst Estimates on EPS

Seth Jayson, The Motley Fool
Updated

Nike (NYS: NKE) reported earnings yesterday. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Feb. 29 (Q3), Nike met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue grew significantly, and GAAP earnings per share increased.


Margins contracted across the board.

Revenue details
Nike reported revenue of $5.85 billion. The 15 analysts polled by S&P Capital IQ predicted net sales of $5.82 billion on the same basis. GAAP reported sales were 15% higher than the prior-year quarter's $5.08 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $1.20. The 18 earnings estimates compiled by S&P Capital IQ anticipated $1.17 per share. GAAP EPS of $1.20 for Q3 were 11% higher than the prior-year quarter's $1.08 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 43.8%, 200 basis points worse than the prior-year quarter. Operating margin was 13.0%, 60 basis points worse than the prior-year quarter. Net margin was 9.6%, 70 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $6.55 billion. On the bottom line, the average EPS estimate is $1.39.

Next year's average estimate for revenue is $24.19 billion. The average EPS estimate is $4.93.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 2,108 members rating the stock outperform and 124 members rating it underperform. Among 648 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 625 give Nike a green thumbs-up, and 23 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Nike is outperform, with an average price target of $108.24.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of Nike. Motley Fool newsletter services have recommended creating a diagonal call position in Nike. The Motley Fool has a disclosure policy.

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