Nike's Q2 revenue beats expectations on wholesale segment strength

Overview

• Athletic apparel maker's fiscal Q2 revenue rose, beating analyst expectations

• Net income for fiscal Q2 beat analyst estimates

• Gross margin decreased due to higher tariffs in North America

Outlook

• Nike is focusing on realigning teams and strengthening partner relationships for growth

Result Drivers

• WHOLESALE GROWTH - Wholesale revenues increased 8% due to strong performance in North America

• DIGITAL SALES DECLINE - Nike Direct revenues fell 8% due to a 14% decrease in digital sales

• GROSS MARGIN PRESSURE - Gross margin decreased by 300 basis points due to higher tariffs in North America

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 24 "strong buy" or "buy", 14 "hold" and 2 "sell" or "strong sell"

• The average consensus recommendation for the footwear peer group is "buy"

• Wall Street's median 12-month price target for Nike Inc is $84.00, about 27.9% above its December 17 closing price of $65.69

• The stock recently traded at 31 times the next 12-month earnings vs. a P/E of 42 three months ago

Press Release: ID:nBw3GJwMVa

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