Nike shares jumped 6% in after-hours trading on news that earnings rose 15% to $645 million in the first quarter.
Nike (NKE) said revenue rose 18% to $6 billion. Diluted earnings per share increased 19% to $1.36 in the first quarter, reflecting�a 3% decrease in shares outstanding. That beat analysts’ per-share forecast, and was an increase from $559 million, or $1.17 per share, in the same quarter last year.
On a day when the shares were sullied in the broader market decline, investors forgave a weak margin story at the athletic shoe and clothing giant.�Nike’s�gross margins declined 270 basis points to 44.3%. Higher costs and the sale of more off-price goods were the culprits, offsetting strong sales in direct-to-customer operations and cost-cutting measures. CEO Mark Parker said the company continues to leverage brands to drive growth.
“It pays to be prudent in times like these. It’s also essential that we remain on the offense, creating opportunities. We do that by connecting with consumers, designing innovative products and delivering amazing experiences,” Parker said in�the first quarter earnings release.
In the first quarter,��the company bought back 7.7 million shares, spending about $649 million� — part of a multi-year, $5 billion share repurchase program. The company had $3.7 billion in cash and short term investments on the balance sheet as of August 31 and is paying a 1.4% yield.
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