The Growth Factors Spiking NIKE Revenues And Earnings

In this series, we’ll analyze the results of the past quarter and the reasons why NIKE continues to outperform.

Phalguni Soni - Author

Nov. 20 2020, Updated 12:25 p.m. ET


NIKE’s businesses

Based in Beaverton, Oregon, NIKE (NKE) is the world’s largest sportswear and footwear company. The company designs, markets, and distributes footwear and apparel products for a number of sports. Its core sports categories include running, basketball, and soccer.

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#1 sports brand

NIKE is the world’s number one sports brand.[1. “The Forbes Fab 40: The World’s Most Valuable Sports Brands 2014”] Its brand value was estimated at $19 billion by Forbes Magazine in 2014. Besides the NIKE brand, the company’s stable of brands also includes these:

  • Brand Jordan – named after iconic basketball player Michael Jordan
  • Converse – acquired in 2003
  • Hurley – targeted at action sports like surfing and skateboarding

For a detailed overview of the company’s businesses, read Traditionally innovative: A must-know investor’s guide to NIKE.

NIKE’s quarterly earnings update

The company reported financial results for the second quarter of fiscal year 2015[1. Quarter ending November 30, 2014 – Fiscal year ends on May 31, 2015] on Thursday, December 18, 2014. NIKE’s performance continued to outperform with the firm beating consensus Wall Street estimates for revenues, net income and earnings per share, or EPS.

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NIKE’s outperformance

Despite being around for over 50 years, NIKE continues to deliver above-average growth and earnings. In each of the past eight quarters, NIKE has beaten Wall Street estimates on net income and EPS. In terms of revenues, this is the sixth quarter out of the last eight that the company’s come out ahead of revenue estimates.

Series components

In this series, we’ll analyze the results of the past quarter and the reasons why NIKE continues to outperform. We’ll discuss the company’s key growth drivers, both present and future, and how its market share and competitive position compare to industry peers such as Under Armour (UA) and Adidas (ADDYY).

UA and NKE are part of the Consumer Discretionary Select Sector SPDR ETF (XLY) and the SPDR S&P 500 ETF Trust (SPY).


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