Nike Q3 revenue flat, net income down 35% but beats estimates amid turnaround
Overview
U.S. athletic apparel and footwear maker's fiscal Q3 revenue was flat, slightly beating analyst expectations
Net income for fiscal Q3 fell 35% yr/yr but beat analyst estimates
Gross margin declined due to higher tariffs in North America
Outlook
Company says 'Win Now' actions will continue to impact results over the balance of the calendar year
Result Drivers
REGIONAL PERFORMANCE - Co said flat overall revenue reflected growth in North America, offset by declines in EMEA and Greater China
TARIFF IMPACT - Gross margin decreased 130 basis points to 40.2 percent, primarily due to higher tariffs in North America
DIRECT SALES WEAKNESS - Nike Direct revenues fell 4 percent, driven by a 9 percent decrease in digital sales and a 5 percent decrease in Nike-owned stores
Company press release: ID:nBw7sB1y5a
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q3 Revenue | Slight Beat* | $11.28 bln | $11.24 bln (24 Analysts) |
Q3 EPS |
| $0.35 |
|
Q3 Net Income | Beat | $520 mln | $417.33 mln (21 Analysts) |
Q3 Gross Margin |
| 40.20% |
|
Q3 Gross Profit |
| $4.53 bln |
|
Q3 Pretax Profit |
| $650 mln |
|
*Applies to a deviation of less than 1%; not applicable for per-share numbers.
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 $73.00, about 42.5% above its March 30 closing price of $51.24
The stock recently traded at 24 times the next 12-month earnings vs. a P/E of 31 three months ago
For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.
