Sportswear giant Nike surpassed analysts’ expectations to deliver a billion dollar performance last quarter.
Nike yesterday reported net income of US$1.1 billion, an increase of 32 per cent over the corresponding period in 2018, after strong sales performance by the company in the second quarter of its financial year ended November 30, 2019.
Revenue for the company increased 10 per cent to US$10.3 billion and was driven by growth in all its markets, Nike said.
Increased revenue coupled with a strong gross margin expansion, a lower tax rate and average share count resulted in earnings per share increased to $0.70, which surpassed analysts’ average predictions of $0.50.
Chairman, President and CEO of Nike, Mark Parker, said “Nike has proven again that innovation is our greatest competitive edge – turning athlete insights into breakthrough product and digital services, as we offer more choice to more consumers at an accelerated pace,” adding that “Our Nike team is fuelling our current momentum, and I’ve never been more optimistic about the future of this future.”
“As we deliver a relentless flow of innovation and scale Nike’s digital advantage, we are positioned for even greater competitive separation and long-term shareholder value creation.”– Executive Vice President and Chief Financial Officer at Nike, Andy Campion
Parker will set down from his posts in January 2020 and assume the role of executive chairman of the Board of Directors. Parker will be replaced by John Donahoe, former eBay CEO and member of Nike’s board.
Individual brands turned in creditable performances as Nike improved 12 per cent to $9.8 billion while Converse revenues jumped to $480 million, a 15 per cent increase for the quarter.
Despite the positive growth, selling and administrative expenses increased to $3.3 billion, a six per cent jump, while operating overhead expense moved up nine per cent to $2.4 billion.
Executive Vice President and Chief Financial Officer at Nike, Andy Campion, said “As we deliver a relentless flow of innovation and scale Nike’s digital advantage, we are positioned for even greater competitive separation and long-term shareholder value creation.”
It was also reported that the company repurchased 10.1 million shares valued at approximately $922 million under a four-year, $15 billion programme approved by its Board.
So far, $2.9 billion has been spent to buy back 33.6 billion shares.
It hasn’t been all smooth sailing for the US-based company which closed its Oregon Project running programme in the state following suspension of coach Albert Salazar for doping violations. Shortly after, several runners, led by Mary Cain, said they were abused verbally and emotionally by the disgraced coach.