Summary
NIKE, Inc. reported its second quarter fiscal year 2014 results, demonstrating solid revenue growth and improved profitability. Revenues increased by 8% year-over-year to $6.4 billion, with a 9% increase on a currency-neutral basis, highlighting strong global demand. Net income from continuing operations rose by 3% to $537 million, and diluted earnings per share from continuing operations grew by 4% to $0.59. This performance was driven by broad-based growth across the NIKE Brand, particularly in North America and Western Europe, and a continued strong performance from Converse. The company also achieved a significant improvement in gross margin, up 140 basis points to 43.9% for the quarter. This expansion was primarily attributed to higher average selling prices, lower product costs, and a growing contribution from the higher-margin Direct to Consumer (DTC) business. While selling and administrative expenses increased, they grew at a slower pace than revenue in the latter part of the period, contributing to overall profit improvement. The company also benefited from a lower effective tax rate. Looking ahead, NIKE's futures orders, a key indicator of future demand, showed a healthy 12% increase (13% excluding currency), suggesting continued positive momentum. The company's ongoing focus on brand strength, product innovation, and expanding its DTC channels appears to be paying off, positioning NIKE for sustained growth.
Financial Highlights
50 data points| Revenue | $6.43B |
| Cost of Revenue | $3.60B |
| Gross Profit | $2.83B |
| SG&A Expenses | $2.09B |
| Operating Income | $1.32B |
| Net Income | $534.00M |
| EPS (Basic) | $0.30 |
| EPS (Diluted) | $0.29 |
| Shares Outstanding (Basic) | 1.78B |
| Shares Outstanding (Diluted) | 1.82B |
Key Highlights
- 1Revenues grew 8% to $6.4 billion, with a 9% increase on a currency-neutral basis, indicating strong global demand.
- 2Net income from continuing operations increased 3% to $537 million, and diluted EPS from continuing operations rose 4% to $0.59.
- 3Gross margin expanded by 140 basis points to 43.9%, driven by higher average selling prices, lower product costs, and DTC growth.
- 4NIKE Brand revenues increased 7% (9% excluding currency), with strong performance across footwear and apparel.
- 5Converse segment revenue grew 14% (11% excluding currency), demonstrating continued brand strength.
- 6Futures orders for NIKE Brand footwear and apparel, scheduled for delivery from December 2013 through April 2014, were up 12% (13% excluding currency), signaling strong future demand.
- 7Effective tax rate decreased to 25.1% for the quarter, benefiting from earnings in lower tax rate jurisdictions.