Nike Q1 earnings rise 9 percent

Nike, for its first quarter ended August 31, 2016, said that strong global demand drove double-digit currency-neutral revenue growth internationally with six percent revenue growth in North America. Diluted earnings per share were 0.73 dollars, up 9 percent driven by strong revenue growth, operating overhead leverage, a lower effective tax rate and a lower average share count partially offset by a gross margin decline and higher demand creation expense in an Olympic quarter.

“Fuelled by an incredible summer of sport, Nike delivered strong global growth—and led the industry through disruptive innovation,” said Mark Parker, Chairman, President and CEO, Nike, adding, “Q1 also showed how we’re amplifying every category through sports style innovation, transforming retail by connecting the digital and physical experience.”

First quarter income statement review

Revenues for Nike rose 8 percent to 9.1 billion dollars, up 10 percent on a currency-neutral basis, while revenues for the Nike brand were 8.5 billion dollars, up 10 percent driven by double-digit growth in Greater China, Western Europe, emerging markets, Central & Eastern Europe and Japan, including strong growth in sportswear, running and the Jordan brand.

Revenues for Converse were 574 million dollars, up 4 percent, driven by growth in North America which was slightly offset by declines in Europe and Asia Pacific.

Gross margin declined 200 basis points to 45.5 percent. Net income increased 6 percent to 1.2 billion dollars as revenue growth and a lower effective tax rate more than offset lower gross margin and higher demand creation expense, while diluted earnings per share increased 9 percent from the prior year to 0.73 dollars reflecting nearly a 3 percent decline in the weighted average diluted common shares outstanding.

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