Upcoming AWS Coverage on Iconix Brand Group Post-Earnings Results
LONDON, UK / ACCESSWIRE / March 30, 2017 / Active Wall St. announces its post-earnings coverage on NIKE, Inc. (NYSE: NKE). The Company released its third quarter fiscal 2017 financial results on March 21, 2017. The athletic footwear and apparel juggernaut topped earnings estimates, but missed sales expectations. Register with us now for your free membership at:
http://www.activewallst.com/register/
One of NIKE’s competitors within the Textile – Apparel Footwear & Accessories space, Iconix Brand Group, Inc. (NASDAQ: ICON), reported on February 22, 2017, its financial results for the fourth quarter and full year ended December 31, 2016. AWS will be initiating a research report on Iconix Brand in the coming days.
Today, AWS is promoting its earnings coverage on NKE; touching on ICON. Get our free coverage by signing up to:
http://www.activewallst.com/register/
Earnings Reviewed
For its fiscal 2017 third quarter ended February 28, 2017, revenues for NIKE increased 5%, or up 7% on a currency-neutral basis, to $8.43 billion led by continued double-digit growth in Greater China, Western Europe, and the emerging markets, compared to revenue of $8.03 billion in Q3 FY16. Sales numbers missed analysts’ consensus of $8.47 billion.
During Q3 FY17, Nike’s gross margin contracted 140 basis points to 44.5% compared to 45.9% in Q3 FY16 as higher average selling prices were more than offset by higher product costs, unfavorable changes in foreign exchange rates and the impact of higher off-price sales. The Company’s selling and administrative expense decreased 3% to $2.5 billion. During the reported quarter, Nike’s Demand creation expense was $749 million, down 7%, as fiscal 2017 spending was frontloaded towards the first six months due to significant investments around the Olympics and the European Championships.
During Q3 FY17, Nike’s net income increased 20% to $1.1 billion compared to net income of $950 million and diluted earnings per share increased 24% to $0.68 versus $0.55 per diluted share in the previous year as revenue growth, selling and administrative expense leverage, higher other income (net), a lower tax rate, and a 3% decline in the weighted average diluted common shares outstanding more than offset lower gross margin. The Company’s earnings numbers surpassed market estimates of $0.53 per share.
Segment Results
During Q3 FY17, revenues for the Company’s NIKE Brand were $7.9 billion, increasing 7% 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. Nike’s revenues for Converse were $498 million, up 3% on a currency-neutral basis, driven by growth in North America. Consumer demand in all geographies drove revenue growth across the NIKE Brand portfolio.
During Q3 FY17, Nike’s North America revenue grew 3% on both a reported and constant currency basis as the Company continues to see balanced growth across both footwear and apparel, highlighted by another quarter of strong growth in NIKE Sportswear and the Jordan Brand. EBIT growth of 9% outpaced revenue growth as gross margin expansion and SG&A leverage delivered increased profitability.
For the international markets, in Western Europe, revenue increased 10% on a currency-neutral basis as the Company delivered another quarter of strong multidimensional growth, led by its Sportswear, Running and Global Football categories. On a reported basis, revenue increased 4% while EBIT declined 13%, reflecting the impact of transactional FX headwinds and higher product costs on gross margin, partially offset by SG&A leverage.
For Nike’s emerging markets, revenue grew 13% on a currency-neutral basis, led by its Sportswear and Running categories. On a reported basis, revenue increased 8% while EBIT decreased 4% as results continue to be heavily impacted by FX.
Nike’s Greater China delivered another quarter of extraordinary results, with currency neutral revenue growing 15%. The Company continues to see strong momentum across the business with double-digit growth in wholesale and DTC, footwear and apparel, and nearly all categories.
Balance Sheet Review
During Q3 FY17, inventories for NIKE, Inc. were $4.9 billion, up 7% compared to the prior year as a 3% 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. The Company’s cash and short-term investments were $6.2 billion, $1.1 billion higher than the prior year as growth in net income and proceeds from the issuance of debt in Q2 FY17 as well as proceeds from employee exercises of stock options more than offset share repurchases, higher dividends, and investments in infrastructure.
Share Repurchases
During Q3 FY17, NIKE repurchased a total of 8.9 million shares for approximately $475 million as part of its four-year $12 billion program approved by the Company’s Board of Directors in November 2015. As of February 28, 2017, a total of 64.9 million shares had been repurchased under this program for approximately $3.6 billion.
Stock Performance
On Wednesday, March 29, 2017, NIKE’s share price finished yesterday’s trading session at $56.68, slightly up 0.11%. A total volume of 7.45 million shares exchanged hands. The stock has advanced 10.85% and 3.11% in the last three months and past six months, respectively. Furthermore, since the start of the year, shares of the Company have surged 11.86%. The stock is trading at a PE ratio of 23.67 and has a dividend yield of 1.27%.
Active Wall Street:
Active Wall Street (AWS) produces regular sponsored and non-sponsored reports, articles, stock market blogs, and popular investment newsletters covering equities listed on NYSE and NASDAQ and micro-cap stocks. AWS has two distinct and independent departments. One department produces non-sponsored analyst certified content generally in the form of press releases, articles and reports covering equities listed on NYSE and NASDAQ and the other produces sponsored content (in most cases not reviewed by a registered analyst), which typically consists of compensated investment newsletters, articles and reports covering listed stocks and micro-caps. Such sponsored content is outside the scope of procedures detailed below.
AWS has not been compensated; directly or indirectly; for producing or publishing this document.
PRESS RELEASE PROCEDURES:
The non-sponsored content contained herein has been prepared by a writer (the “Author”) and is fact checked and reviewed by a third party research service company (the “Reviewer”) represented by a credentialed financial analyst, for further information on analyst credentials, please email info@activewallst.com. Rohit Tuli, a CFA® charterholder (the “Sponsor”), provides necessary guidance in preparing the document templates. The Reviewer has reviewed and revised the content, as necessary, based on publicly available information which is believed to be reliable. Content is researched, written and reviewed on a reasonable-effort basis. The Reviewer has not performed any independent investigations or forensic audits to validate the information herein. The Reviewer has only independently reviewed the information provided by the Author according to the procedures outlined by AWS. AWS is not entitled to veto or interfere in the application of such procedures by the third-party research service company to the articles, documents or reports, as the case may be. Unless otherwise noted, any content outside of this document has no association with the Author or the Reviewer in any way.
NO WARRANTY
AWS, the Author, and the Reviewer are not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this document. AWS, the Author, and the Reviewer expressly disclaim any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Additionally, AWS, the Author, and the Reviewer do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.
NOT AN OFFERING
This document is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Please read all associated disclosures and disclaimers in full before investing. Neither AWS nor any party affiliated with us is a registered investment adviser or broker-dealer with any agency or in any jurisdiction whatsoever. To download our report(s), read our disclosures, or for more information, visit http://www.activewallst.com/disclaimer/.
CONTACT
For any questions, inquiries, or comments reach out to us directly. If you’re a company we are covering and wish to no longer feature on our coverage list contact us via email and/or phone between 09:30 EDT to 16:00 EDT from Monday to Friday at:
Email: info@activewallst.com
Phone number: 1-858-257-3144
Office Address: 3rd floor, 207 Regent Street, London, W1B 3HH, United Kingdom
CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.
SOURCE: Active Wall Street
ReleaseID: 458535
