Nike Beats on EPS But GAAP Results Lag

Seth Jayson, The Motley Fool
Updated

Nike (NYS: NKE) reported earnings on Dec. 20. Here are the numbers you need to know.

The 10-second takeaway
 For the quarter ended Nov. 30 (Q2), Nike met expectations on revenues and beat expectations on earnings per share.

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


Gross margins shrank, operating margins grew, net margins dropped.

Revenue details
 Nike reported revenue of $5.96 billion. The 14 analysts polled by S&P Capital IQ expected revenue of $5.97 billion on the same basis. GAAP reported sales were 3.9% higher than the prior-year quarter's $5.73 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 $1.14. The 20 earnings estimates compiled by S&P Capital IQ predicted $1.00 per share. GAAP EPS of $0.84 for Q2 were 16% lower than the prior-year quarter's $1.00 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 42.5%, 20 basis points worse than the prior-year quarter. Operating margin was 11.7%, 70 basis points better than the prior-year quarter. Net margin was 6.4%, 180 basis points worse than the prior-year quarter.

Looking ahead
 Next quarter's average estimate for revenue is $6.07 billion. On the bottom line, the average EPS estimate is $1.39.

Next year's average estimate for revenue is $25.34 billion. The average EPS estimate is $5.21.

Investor sentiment
 The stock has a five-star rating (out of five) at Motley Fool CAPS, with 2,290 members out of 2,413 rating the stock outperform, and 123 members rating it underperform. Among 682 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 660 give Nike a green thumbs-up, and 22 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 $104.07.

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The article Nike Beats on EPS But GAAP Results Lag originally appeared on Fool.com.

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. The Motley Fool owns shares of Nike. Motley Fool newsletter services recommend Nike. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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