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Nike Hits 52-Week High on Solid Q1 Earnings and Revenues

Shares of athletic apparel, footwear and accessories retailer, Nike Inc.NKE soared to a new 52-week high of $125.95 on Friday, Sep 25, before closing trade at $125.00. The stock's solid run at the index came after the company posted better-than-expected first-quarter fiscal 2016 results on Sep 24.

The sports gear giant, reported earnings of $1.34 per share for the first quarter, which increased nearly 23% year over year and surpassed the Zacks Consensus Estimate of $1.19. The bottom-line growth was driven by an impressive top line, gross margin improvement, lower tax rate, reduced share count and selling, general and administrative (SG&A) expenses leverage.

The company's top line surged 5.4% to $8,414 million and also came ahead of the Zacks Consensus estimate of $8,215.9 million on the back of robust demand for its brands and significant growth in its major product categories and all of its locations. Sales also jumped 14% on a currency neutral basis.

Following a strong start to fiscal 2016, management remains optimistic about the rest of fiscal 2016 as it expects the strong momentum witnessed in the first quarter to continue. Nike continues to anticipate revenue growth in the mid-single-digit range for fiscal 2016, while gross margin is expected to expand about 50 bps.

Nike's solid quarterly performance reflects its focus on adopting innovations to keep up with its customers. In spite of foreign currency headwinds, the company's results remain impressive, backed by its continuous efforts to exploit growth opportunities along with efficient risk management. Going forward, Nike plans to follow these standards in order to enhance shareholder value in the long run.

Zacks Rank

Nike currently carries a Zacks Rank #2 (Buy). Other favorably placed stocks in the apparel-shoe industry include Skechers USA Inc. SKX , Xtep International Holdings Limited XTEPY and Sequential Brands Group, Inc. SQBG . While Skechers and Xtep International carry a Zacks Rank #1 (Strong Buy), Sequential Brands holds a Zacks Rank #2.

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NIKE INC-B (NKE): Free Stock Analysis Report

SKECHERS USA-A (SKX): Free Stock Analysis Report

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XTEP INTL HLDGS (XTEPY): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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