Nike Reports Mixed 1Q18 Results

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Nike Reports Mixed 1Q18 Results PART 1 OF 5

1Q18 Results Overview: Nike Beats on Earnings, Misses on Revenue

Snapshot of the series

The Oregon-based Nike (NKE) reported results for 1Q18 after the market closed on Thursday, September 26. The results relate to the three months ended August 31.

The company cruised ahead of Wall Street’s bottom-line projections but failed to meet sales expectations. Earnings per share fell 22% YoY (year-over-year) to 57 cents. Analysts, however, were expecting a 34% YoY decline to 48 cents.

1Q18 Results Overview: Nike Beats on Earnings, Misses on Revenue

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Total sales rose 0.1% YoY to $9.07 billion, missing the consensus by $18 million. Nike stock fell 1.9% to $52.67 on September 27, the next trading day.

This five-part series offers a view of the company’s performance during the quarter, its year-to-date stock market performance, valuations, and recent analyst actions.

Valuations update and stock recommendation

Nike’s stock is trading at a one-year forward price-to-earnings ratio of 22.1x, compared to 43x for Under Armour (UAA), 24.1x for Lululemon Athletica (LULU), and 21.3x for Columbia Sportswear (COLM).

The average 12-month price target from 37 analysts covering Nike is $59.20, indicating an upside of ~12% over the next year.

About Nike

With trailing-12-month sales of $34.35 billion, Nike is the world’s largest athletic footwear and apparel company. It derives more than 55% of its revenue from the international markets. Footwear accounts for ~60% of its total sales.

With a brand value of $29.6 billion, Nike stands at the sixteenth spot in Forbes’s list of the world’s most valuable brands.

The company has a market capitalization of $86.45 billion (as of September 27) and it’s part of the S&P 500 Index and the 30-stock Dow Jones Industrial Average Index. It constitutes 3% of the U.S. Consumer Goods ETF (IYK) and 2.6% of the SPDR Consumer Discretionary Select Sector ETF (XLY).


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