Research archive for NKE

Nike reported numbers last evening, for their second quarter, after the bell had rung for the close. It was a beat by most metrics that matter for folks that look at the headlines. I learned something new (which is always a good thing) yesterday, the chief executive, who is essentially a Nike lifer, Mark Parker was on the design team with Tinker Hatfield. So? Both of them actually were considerably good track athletes at university (college), where Tinker actually held the pole vault record at University of Oregon, where he was coached by Phil Knight's mentor and co-founder of Nike, Bill Bowerman.

Nike no friends. After regular market hours, that is. The biggest sports apparel and sports shoes manufacturer in the western world, and one of the most recognisable brands across the globe, reported numbers last evening for the first quarter of their financial year 2017. At face value they actually look quite good, revenues up 8 percent to 9.1 billion, in constant currencies sales were up 10 percent. Diluted earnings per share clocked 73 cents, up 9 percent when compared to the prior financial year. Here is the reason for Mr. Market being disappointed however, future orders worldwide were only up 5 percent, 7 percent in constant currencies. Here is the thing, Nike touts themselves as a growth company, and whilst I firmly believe that to be true, the company needs to deliver growth in the low to mid teens if they are going to continue to attract a premium multiple to the market.

Nike. This is a company that has just been doing it for a while now, both revenues and profits have been growing sharply, leading to a big earnings multiple expansion and with that a rapidly appreciating share price. Share holders have become used to the idea that the stock has just grown as global and in particular, North American sales have consistently been above expectations. In fact, if you visit the Investor Relations landing page of their website, there is Cristiano Ronaldo running away from the crumbling defence, some figurines exploding. And in bold letters there, it states that Nike is a growth company.

Nike did it last night. Nike have been doing it since January 1964. That is over 50 years of doing it. The name change from Blue Ribbon Sports to the name we know today took place in 1971. Bill Bowerman (co-founder) was Phil Knight's coach. Phil Knight had a personal best of 4 minutes and ten seconds for a mile, that is no mean feat! Bowerman was a spectacular coach, and according to Wikipedia, trained 31 Olympic athletes. As well as 16 folks that managed to go under 4 minutes for the mile, the holy grail of middle distance. As Wiki points out, if you do the math, under 4 minutes for a mile means that you are moving at 24.14 km per hour, or 14.91 seconds per 100 metres. The current record for that distance, the mile, belongs to legendary athlete Hicham El Guerrouj of Morocco, who ran 3.43.13 for that distance in 1999.

Nike had a big announcement last evening, sending the stock up over three and a half percent in the aftermarket. Why, what, where? The release tells you everything: Nike, inc. announces new $12 billion share repurchase program, 14 percent increase in quarterly dividend and two-for-one stock split. The current 8 billion Dollar repurchase program will finish in fiscal year 2016, that is when the next one will start. This is a pretty aggressive buyback by historic standards, the release quotes CEO Mark Parker (not related to Spiderman) as saying the company has returned 23 billion Dollars to shareholders over 14 years.

Nike, one of the core Vestact recommended stocks reported numbers last evening, this was for the first quarter of their 2016 financial year. On a currency neutral basis sales increased 14 percent, up 5 percent in Dollar terms to 8.4 billion Dollars. Diluted earnings per share clocked 1.34 Dollars, up an astonishing 23 percent, due to higher gross margins, lower tax rates and most importantly a reflection of stronger revenues. Future orders in Dollars up 9 percent, excluding currency changes, up 17 percent. Yip, this is certainly, as their landing page of their investor relations says, a growth business. Tick that box! That is corny.

Last week Nike released solid fourth quarter and full year earnings which comfortably beat estimates, pushing the stock up 5% on Friday. Fiscal year revenues were up 10% to $30.6bn, this was up 14% if you exclude currency movements. Diluted earnings were up 25% to $3.70 per share for the year thanks to improving margins, share buy backs and of course solid sales growth.

Last night we had 3Q results from NIKE, INC which mostly beat estimates. The big trend in the results was that the stronger dollar had a significant impact on the revenue figure and the earnings figure.

Last night after the close we received second quarter results from Nike. An odd time to release results but it certainly kept us busy and excited in the quiet office. Lets delve into the numbers straight away.

Just did it, again and again. Nike that is. The company released their numbers last evening after the market closed, this is for their first quarter of their 2015 financial year. Revenues grew 15 percent to 8 billion Dollars, all product lines growing nicely apart from the Action Sports and Golf. Last year in the US, there was a net loss of 143.5 courses. It was the 8th successive year in a row that the trend had indicated the sport was losing traction.

Nike reported their fourth quarter and full year numbers post the market last evening. Nigh-Key, not Nigh-ck. In Greek mythology Nike was the goddess of victory, her brothers were Kratos, Bia and Zelus. Other companies and organisations that use the same winged goddess include the first FIFA World Cup trophy, also known as the Jules Rimet trophy. That is quite apt, Nike and Adidas have been locked in mortal combat (not quite, but it is fun to think of it that way) around the football on the go currently.

Talking about Nike being a Dow constituent earlier, the company reported results on Thursday evening after the market had closed. Initially the market reacted positively to the number, that were an earnings beat, but the guidance about the stronger Dollar impacting on sales through to 2015 put a lid on that enthusiasm. This was for the third quarter to end February, that is why the results feel out of whack with the rest of the market, Nike's year end is May. Perhaps there is a lot to be said for breathing that fresh Oregon air. A relatively small state population wise, ranked 39 out of the US states from a density point of view suggests that there are wide open spaces to test the best athletic gear in the world. Nike headquarters are not even in Beaverton, which itself is around 10km from the state capital of Portland. I guess with fresh air and blue skies, the Nike engineers can do their stuff. In late September I wrote a detailed piece about the company, for a refresher -> Nike runs hard!

I have never been to Beaverton in Oregon, a town of 90 thousand folks not far from Portland. The place is far from the bustling streets of New York (on the other side, the West coast), and most significantly for us in the global HQ of Nike Inc. Why Oregon? Well, that is where founder Phil Knight and Bill Bowerman (Knight's track coach) met, at the University of Oregon which is a fair distance away, but probably not unreachable if you are wearing a pair of Nike Zoom Wildhorse. According to Google maps the distance is 171.8 kilometers, perhaps 4 days of really hard trail running will get you there!!

On Friday we received fourth quarter and full year results from one of our big recommended stocks in New York, Nike. Let's predominantly look at the full year numbers and see if we can pick up any trends from the quarterly figures.

On Thursday evening after the market closed in the US Nike released third quarter results which sent the stock up 11%. If you need reminding the Nike share price hit a speed bump a long with the Chinese economy last year. Sales had slowed in that region and inventory was oversupplied. The shares slowly started creeping back as things proved to be not as bad as everyone initially thought and has now surpassed all time highs again. I can safely say we stuck to our guns and added to the stock whenever the opportunity arose and will carry on doing so. Let's look at the numbers.