Nike Delivers Strong Fiscal Q2 Earnings

The company’s shares are up 34% in 2019.

On Thursday, Nike reported its fiscal second-quarter earnings, and the results were pretty positive overall. The company beat earnings and revenue expectations. This caused the company to hit a new 52-week high on Friday.

Overall, Nike has had a good year, and its shares are up 47% from a year earlier. The company’s growth is especially impressive, given some of the economic headwinds it has faced. 

Here is an overview of the company’s latest earnings report and what is next for Nike.

Nike’s Q2 earnings overview

For the second quarter, Nike reported earnings of 71 cents per share, which beat Wall Street estimates of 58 cents per share. And the company’s revenue grew 10% year over year to reach $10.3 billion. This beat analyst estimates of $10.1 billion. 

During the second quarter, the company’s footwear sales increased by 12%, its apparel sales grew by 8%, and its equipment sales were up by 6%. And the company’s digital business grew 38% this quarter.

The U.S. continues to make up the majority of Nike’s sales, but the company did see strong international growth as well. Most notably, the company’s sales grew by 20% in China. And the company’s sales were up by 13% in the Asia-Pacific region and Latin America. 

And the company’s gross margin increased 20 points year over year to reach 44%. This was caused by high average selling prices on some of the company’s most popular brands. But this figure was down slightly from the previous quarter, due to rising tariffs. 

Bottom Line

All in all, it was a pretty solid quarter for Nike, and the company’s shares are up as a result. Big changes are coming for Nike in 2020, including a new CEO. John Donahoe will be succeeding Mark Parker as CEO of Nike next month. 

Most analysts are pretty optimistic when it comes to Nike, and the company is considered a moderate buy. A  Susquehanna Financial Group analyst is hopeful about the CEO transition and said that Donahoe’s “digital chops and brand knowledge” should carry Nike to its next phase of growth.