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Nike Made Management Changes to Drive Innovation

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Price movement

Nike (NKE) has a market cap of $95.0 billion. It fell by 0.27% to close at $55.84 per share on May 26, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -2.1%, -5.8%, and -10.4%, respectively, on the same day.

This means that NKE is trading 3.3% below its 20-day moving average, 6.2% below its 50-day moving average, and 7.7% below its 200-day moving average.

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Related ETF and peers

The iShares Russell Top 200 Growth ETF (IWY) invests 1.2% of its holdings in Nike. This ETF tracks an index of US large-cap growth stocks selected from 200 of the largest US companies by market cap. The YTD price movement of IWY was 0.88% on May 26, 2016.

The market caps of Nike’s competitors are as follows:

  • V.F. Corporation (VFC) – $26.2 billion
  • Under Armour (UA) – $6.9 billion
  • Skechers USA (SKX) – $4.7 billion

Nike made management changes

Nike (NKE) has made the following changes in its management to drive innovation and strengthen consumer connections.

  • Phil McCartney has been named as vice president and general manager of the Nike Footwear segment, effective June 1, 2016.
  • Tom Peddie has been appointed as vice president and general manager of the Integrated Marketplace North America segment, effective July 1, 2016.
  • Ann Hebert has been named as vice president and general manager of the company’s Emerging Markets segment, effective July 1, 2016.
  • Christophe Merkel has been appointed as vice president and general manager of Nike Japan.
  • Jim Reynolds has been named as vice president and general manager of the Athletic Specialty segment, effective June 2016.
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Performance of Nike in fiscal 3Q16

Nike (NKE) reported fiscal 3Q16 revenues of $8.0 billion, an increase of 7.7% compared to revenues of $7.5 billion in fiscal 3Q15. Revenues of its Footwear and Apparel Brands segments rose by 11.1% and 8.4%, respectively. Revenues of the Equipment and Global Brand divisions fell by 7.6% and 41.4%, respectively, in fiscal 3Q16 compared to fiscal 3Q15.

The company’s net income and EPS (earnings per share) rose to $950.0 million and $0.55, respectively, in fiscal 3Q16, compared to $791.0 million and $0.45, respectively, in fiscal 3Q15.

Nike’s cash and cash equivalents and inventories rose by 0.96% and 8.1%, respectively, in fiscal 3Q16 compared to fiscal 3Q15. Its current ratio and debt-to-equity ratio rose to 3.1x and 0.71x, respectively, in fiscal 3Q16, compared to 2.7x and 0.66x, respectively, in fiscal 3Q15.

During fiscal 3Q16, the company repurchased 24.3 million shares for ~$1.5 billion and completed its previously announced four-year share repurchase program in September 2012.

Nike expects to deliver 12% more Nike Brand athletic footwear and apparel orders from March–July 2016 compared to the same period in the previous year.

Quarterly dividend

Nike (NKE) declared a quarterly cash dividend of $0.16 per share on its Class A and Class B common stock. The dividend will be paid on July 5, 2016, to shareholders of record at the close of business on June 6, 2016.

In the next part of our series, we’ll take a look at Sanderson Farms.

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