Summary
NIKE, Inc. (NKE) reported strong results for the third quarter and the first nine months of fiscal year 2013, driven by continued revenue growth and improved profitability. For the third quarter, revenues from continuing operations increased by 9% to $6.2 billion, with a reported net income of $866 million, a significant 55% increase year-over-year, largely due to a substantial gain from the sale of Cole Haan. Diluted earnings per share from continuing operations saw a 20% increase to $0.73. The company demonstrated robust growth across its NIKE Brand, with North America being a key driver. The Direct to Consumer channel continued its strong expansion, indicating successful execution of the company's strategy. Management highlighted a focus on core brands (NIKE, Jordan, Converse, Hurley) and the divestiture of non-core assets like Cole Haan and Umbro, which positively impacted the financial results through a significant gain. Looking ahead, while the company faces some headwinds in specific markets like Greater China, overall performance indicates strong brand momentum and effective operational execution. Investors should note the positive impact of the R&D tax credit on the effective tax rate and the ongoing share repurchase program.
Financial Highlights
50 data points| Revenue | $6.19B |
| Cost of Revenue | $3.45B |
| Gross Profit | $2.74B |
| SG&A Expenses | $1.86B |
| Operating Income | $1.77B |
| Net Income | $866.00M |
| EPS (Basic) | $0.48 |
| EPS (Diluted) | $0.47 |
| Shares Outstanding (Basic) | 1.79B |
| Shares Outstanding (Diluted) | 1.82B |
Key Highlights
- 1Total revenues from continuing operations increased by 9% to $6.2 billion for the third quarter of fiscal 2013, demonstrating sustained top-line growth.
- 2Net income for the third quarter surged by 55% year-over-year to $866 million, significantly boosted by a $231 million after-tax gain from the sale of Cole Haan.
- 3Diluted earnings per share (EPS) from continuing operations rose by 20% to $0.73, showcasing improved profitability on a per-share basis.
- 4The NIKE Brand saw revenue growth of 10% (excluding currency changes), with North America being a major contributor, up 18%.
- 5Direct to Consumer (DTC) sales continued to be a strong growth engine, increasing by 23% (excluding currency changes) for the quarter, representing a growing portion of total NIKE Brand revenues.
- 6The company completed the divestiture of Cole Haan, resulting in a significant gain, and also divested Umbro, signaling a strategic focus on core brands.
- 7The effective tax rate for the quarter decreased significantly by 490 basis points due to the retroactive reinstatement of the U.S. research and development tax credit.