Nike Inc (NYSE:NKE) released its latest quarterly results after closing bell, coming out slightly ahead of consensus on both earnings and revenues. The company’s stock climbed as much as 6 percent in after-hours trading at the New York Stock Exchange after the announcement was made.
Nike beats on EPS, revenue
The athletic goods company reported an increase of 8 percent in revenues from continuing operations, which were reported to be $7 billion for the company’s first fiscal quarter of 2014. Diluted earnings per share from continuing operations increased 37 percent to 86 cents per share. Analysts had been expecting Nike Inc (NYSE:NKE) to report earnings per share of 78 cents on revenue of $6.97 billion.
“We had a great first quarter driven by our unrelenting commitment to delivering innovative products and services to athletes around the world,” said Nike President and CEO Mark Parker in a statement. “Our powerful portfolio of businesses combined with unmatched leadership and resources allows [sic] us to capitalize on opportunities that drive long-term value for our shareholders. I am more excited than ever about our potential to continue to innovate with purpose, and fuel NIKE’s growth.”
Details from Nike’s earnings release
The company said foreign currency exchange rates did not have a significant effect on its total revenue growth. It said revenues for the Nike brand specifically were $6.5 billion, an increase of 7 percent on a currency neutral basis. The company noted in growth in every type of product and every geographical region except the Greater China area. It said revenues in running, basketball, soccer and men’s training were higher and offset a small decline in the Nike sportswear division.
Nike Inc (NYSE:NKE) also said that revenues from its Converse brand were $494 million, a 16 percent increase on a currency neutral basis. The sportswear company reported that strong performance in the U.K., North America and China drove its Converse brand revenues.
The company’s gross margin climbed 120 basis points to 44.9 percent, benefiting from lower costs for raw material, a shift in revenue mix to higher margin products, lower discounts and growth in Nike’s direct to consumer business, which has higher margins. The company noted that those benefits were partially offset by higher than expected labor costs and unfavorable foreign exchange rates.
Nike updates its share repurchasing program
During the quarter, Nike Inc (NYSE:NKE) said it bought back 8.4 million shares of its stock for about $526 million as part of its four-year $8 billion program, which was approved by the company’s board of directors in September 2012. As of the end of the quarter, the company had bought back a total of 23.7 million shares for a total of about $1.3 billion.