Summary
NIKE, Inc. reported strong revenue growth of 18% for the second quarter and the first six months of fiscal year 2012, reaching $5.7 billion and $11.8 billion, respectively. This growth was driven by broad-based demand across product types and geographies, particularly in North America and Emerging Markets. Despite a 2.6% decline in gross margin due to increased product input costs, operating overhead leverage and a lower effective tax rate contributed to a 3% increase in net income for the quarter ($469 million) and a 10% increase year-to-date ($1.114 billion). Diluted earnings per share saw a more significant increase of 6% for the quarter and 13% year-to-date, primarily due to a reduced share count resulting from an active share repurchase program. The company's Direct to Consumer (DTC) channels continue to be a strong growth driver, with DTC revenues increasing 20% on a currency-neutral basis. While inventory levels increased significantly (35% year-over-year), management attributes this to both higher unit demand and increased product input costs. NIKE also continues to invest in demand creation and operating overhead to support its growth initiatives. The company maintains a strong liquidity position with $3.4 billion in cash, cash equivalents, and short-term investments.
Financial Highlights
50 data points| Revenue | $5.55B |
| Cost of Revenue | $3.17B |
| Gross Profit | $2.38B |
| SG&A Expenses | $1.73B |
| Operating Income | $1.14B |
| Net Income | $469.00M |
| EPS (Basic) | $0.26 |
| EPS (Diluted) | $0.25 |
| Shares Outstanding (Basic) | 1.84B |
| Shares Outstanding (Diluted) | 1.87B |
Key Highlights
- 1Revenue increased 18% year-over-year to $5.7 billion for the second quarter of fiscal 2012, driven by strong demand across geographies and product categories.
- 2Gross margin decreased by 260 basis points to 42.7% due to higher product input costs (materials and labor), partially offset by Direct to Consumer growth and higher selling prices.
- 3Net income for the quarter increased 3% to $469 million, while year-to-date net income rose 10% to $1.114 billion.
- 4Diluted EPS grew 6% to $1.00 for the quarter and 13% to $2.36 year-to-date, outpacing net income growth due to share repurchases.
- 5Direct to Consumer (DTC) revenues grew 20% on a currency-neutral basis, representing approximately 15% of NIKE Brand revenues.
- 6Inventories increased significantly by 35% year-over-year, attributed to higher unit demand and increased product input costs.
- 7The company repurchased approximately 7.6 million shares of common stock during the quarter for $674 million under its $5 billion share repurchase program.