Summary
NIKE, Inc. reported solid financial results for the third quarter and the first nine months of fiscal year 2017, demonstrating continued revenue growth and profitability. Total revenues increased by 5% in the third quarter and 6% year-to-date, with a notable 7% and 8% increase on a currency-neutral basis respectively, highlighting strong underlying business momentum. Net income saw a significant increase of 20% for the quarter and 11% year-to-date, translating to a 24% and 14% rise in diluted earnings per share. This growth was driven by robust performance across NIKE's geographic segments, particularly in Greater China and Western Europe, and a strategic expansion of Direct-to-Consumer (DTC) sales channels. The company's effective tax rate also saw a favorable decrease due to tax reserve reductions and a greater proportion of earnings from international operations. Despite a slight decrease in gross margin primarily due to unfavorable foreign currency movements and higher product costs, the company managed to control selling and administrative expenses, contributing to overall profit growth. NIKE continued its commitment to shareholder returns through its share repurchase program. The company's strong liquidity position, supported by significant cash and investments and access to credit facilities, positions it well to navigate market dynamics and pursue future growth opportunities.
Financial Highlights
50 data points| Revenue | $8.43B |
| Cost of Revenue | $4.68B |
| Gross Profit | $3.75B |
| SG&A Expenses | $2.50B |
| Net Income | $1.14B |
| EPS (Basic) | $0.69 |
| EPS (Diluted) | $0.68 |
| Shares Outstanding (Basic) | 1.65B |
| Shares Outstanding (Diluted) | 1.69B |
Key Highlights
- 1Revenues increased by 5% to $8.4 billion in Q3 FY17 and 6% year-to-date to $25.7 billion, with currency-neutral growth of 7% and 8% respectively.
- 2Net income rose by 20% to $1.14 billion in Q3 FY17 and 11% year-to-date to $3.23 billion.
- 3Diluted earnings per share (EPS) grew by 24% to $0.68 in Q3 FY17 and 14% year-to-date to $1.91.
- 4Direct-to-Consumer (DTC) revenue growth was strong, increasing 13% currency-neutral in Q3 and 20% currency-neutral year-to-date, representing a growing portion of total NIKE Brand revenue.
- 5Gross margin declined by 140 basis points in Q3 and 150 basis points year-to-date, impacted by unfavorable currency movements and higher product costs, although partially offset by higher average selling prices (ASP).
- 6Selling and administrative expenses decreased by 3% in Q3 due to lower demand creation costs, and increased by 3% year-to-date with controlled growth.
- 7The effective tax rate decreased to 13.8% in Q3 and 13.1% year-to-date, mainly due to a reduction in tax reserves and a higher proportion of international earnings.