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Understanding Nike’s Performance in Fiscal 2Q17

Gabriel Kane - Author

Nov. 20 2020, Updated 12:18 p.m. ET

Price movement

Nike (NKE) has a market cap of $86.9 billion and rose 1.9% to close at $51.79 per share on December 20, 2016. The stock’s weekly, monthly, and YTD (year-to-date) price movements were -0.98%, 1.7%, and -16.2%, respectively, on the same day.

NKE is now trading 1.2% above its 20-day moving average, 1.5% above its 50-day moving average, and 6.3% below its 200-day moving average.

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Related ETF and peers

The iShares Russell Top 200 Growth ETF (IWY) invests 0.89% of its holdings in Nike. The YTD price movement of IWY was 7.1% on December 20.

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

  • VF Corporation (VFC): $22.7 billion
  • Under Armour (UAA): $12.3 billion
  • Skechers USA (SKX): $4.0 billion

Nike’s performance in fiscal 2Q17

Nike reported fiscal 2Q17 revenues of $8.2 billion, which represents a YoY (year-over-year) rise of 6.4%, as compared to revenues of $7.7 billion in fiscal 2Q16. Revenues from its Footwear, Apparel Brands, and Global Brand divisions rose 5.0%, 7.3%, and 16.7%, respectively, YoY in fiscal 2Q17.

The company’s gross profit margin narrowed 140 basis points YoY in fiscal 2Q17 due to increases in product costs, the negative impact of foreign exchange, and a rise in off-price sales, partially offset by an increase in selling price.

Net income and EPS

Its net income and EPS (earnings per share) rose to $842.0 million and $0.50, respectively, in fiscal 2Q17, as compared to $785.0 million and $0.45, respectively, in fiscal 2Q16. The rise in EPS was due to an increase in revenue and a fall in weighted average diluted common shares outstanding, partially offset by a fall in gross margins,

Nike’s cash and cash equivalents and inventories rose 12.7% and 9.4%, respectively, YoY in fiscal 2Q17. Its current ratio rose to 3.1x in fiscal 2Q17, as compared to 3.0x in fiscal 2Q16.

In fiscal 2Q17, Nike repurchased a total of 17.0 million shares worth ~$900 million under its $12-billion share repurchase program.

For an ongoing analysis of this sector, please visit Market Realist’s Consumer Discretionary page.


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