7 Metrics Highlight Nike's First Quarter
Thanks to a controversial marketing campaign, Nike (NYSE: NKE) was already in the spotlight before its quarterly earnings release this week. But the sports footwear and apparel company stirred things up yet again this week when it reported double-digit revenue and earnings-per-share growth for its first quarter of fiscal 2019.
As investors consider the implications of Nike's most recent earnings report, here's an overview of some of its most important metrics from the quarterly update, including soaring digital sales, a buyback of millions of its own shares, and more.
1. Revenue increased 10%
Nike's top line increased 10% year over year to $9.95 billion. On a constant currency basis, Nike's revenue was up 9% year over year -- an acceleration compared to constant-currency revenue growth of 8% year over year in the retailer's fiscal fourth quarter. Nike's revenue beat a consensus analyst estimate for revenue of $9.94 billion during the quarter.
Nike CEO Mark Parker said the company saw "strong momentum and balanced growth across our entire business" during the quarter.
2. Earnings per share rose 18%
Nike's EPS climbed 18% year over year to $0.67. Not only did this beat a consensus analyst forecast for EPS of $0.63, but this growth rate also marked an acceleration compared to the 15% increase Nike EPS saw in its fourth quarter of fiscal 2018.
3. Nike's digital sales increased 36%
A 36% year-over-year increase in Nike's digital sales meant digital was the company's "fastest-growing channel in each and every geography," explained Nike CFO Andy Campion in the company's fiscal first-quarter earnings call.
4. Footwear sales rose 10%
The retailer's footwear sales saw double-digit growth on a consolidated basis, rising 10% year over year. This was a significant acceleration from 6% growth for footwear in the company's fiscal fourth quarter.
5. Apparel sales climbed 11%
During the fiscal first quarter, Nike kept up the strong 11% year-over-year growth in apparel sales the retailer posted in its previous quarter. Continued strong momentum was "driven by fleece, tops and bottoms, jackets and pants," Parker said during the company's Q1 earnings call.
6. Nike repurchased 17.8 million shares
Nike spent $1.4 billion to repurchase 17.8 million of its shares. This spending on repurchases was significant, but down from the $1.6 billion Nike spent buying back shares in its fiscal fourth quarter. The lower spend is likely because Nike stock was trading higher during the quarter than it was the previous quarter; shares have surged 30% in the past six months and 57% in the past 12 months.
This leaves just $1.9 billion left in Nike's $12 billion four-year share repurchase authorization. But management already has a new four-year $15 billion share repurchase program in place that will initiate once the current program ends.
7. Management expects full-year revenue growth "in the high single digits"
Nike mostly maintained its revenue outlook, which was revised higher in its previous quarter. The company's guidance calls for fiscal 2019 revenue to rise at a rate that is in the "high single digits" compared to revenue in fiscal 2018. Though management narrowed its guidance range to expect revenue growth "at the lower end of that range." In other words, management likely expects growth between about 7% and 8% instead of growth between approximately 7% and 9%.
10 stocks we like better than NikeWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Nike wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of August 6, 2018
Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool recommends Nike. The Motley Fool has a disclosure policy.