Nike’s All-Time High on Earnings Beat: What’s the Score for 3Q15?

Nike’s 3Q 2015 earnings review

Nike (NKE), the world’s largest sportswear and athletic footwear firm, reported 3Q15 earnings on March 19, 2015. The company posted strong results in the quarter. The quarter also featured some exciting sporting events and product launches.

The company reported growth across key geographies and product categories, taking the stock to a new all-time high of over $100 on March 20. This financial performance underlined Nike’s status as a growth company, despite being around for over 50 years.

Nike’s All-Time High on Earnings Beat: What’s the Score for 3Q15?

Nike’s results

Nike delivered an earnings beat in 3Q15. Diluted EPS (or earnings per share) rose 19% year-over-year to $0.89 per share. Consensus Wall Street analyst estimates put EPS at $0.86. This was the 11th straight quarter that the company had come ahead of Wall Street earnings expectations.

The strong performance came on the back of some key company- and industry-specific growth drivers. One of the highlights of the quarter was the NBA All-Star Game in New York, when Nike unveiled its SNKR app, which we’ll explore in Part 10.

We’ll analyze these industry-specific and company-specific factors in this series and their impact on the company’s share price and valuations. We’ll also look at its growth prospects and compare them with those of its peers.

Earnings updates

Lululemon Athletica (LULU), Nike’s competitor in athleisurewear, declared its fiscal 2015 results on March 26. The number two US sportswear brand Under Armour (UA), and Nike’s biggest US competitor, is expected to report 1Q15 earnings in the latter half of April, as is footwear peer Skechers (SKX).

NKE and UA constitute 3.94% of the portfolio holdings of the Consumer Discretionary Select Sector SPDR Fund (XLY). Taken together, they also make up ~0.4% of the portfolio holdings in the Vanguard S&P 500 ETF (VOO) and ~0.4% of the iShares Core S&P 500 ETF (IVV).

For a detailed overview of Nike (NKE) and its operations, read Traditionally innovative: A must-know investor’s guide to Nike.