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Nike Rallies 2% on Q2 Earnings, Revenue Beats

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Nike Inc. (NKE - Free Report) just released its second quarter fiscal 2017 financial results after the bell, posting earnings of 50 cents per share and revenues of $8.2 billion. NKE is a #3 (Hold) on the Zacks Rank, and is up 2% to $52.96 per share in after-hours trading.

Beat earnings estimates. The company reported diluted earnings of 11 cents per share, topping the Zacks Consensus Estimate of 43 cents per share and increasing 11% year-over-year. Earnings grew faster than sales, primarily due to selling and administrative expense leverage and a lower average share count.

Beat revenue estimates. The company saw total revenue figures of $8.2 billion, surpassing our consensus estimate of $8.082 billion and gaining 6% year-over-year, or 8% on a currency neutral basis. Revenues for the NIKE brand were $7.7 billion, while Converse revenues were $416 million.

Gross margin contracted 140 basis points to 44.2%, as higher average selling prices were more than offset by higher product costs, unfavorable changes in foreign exchange rates and the impact of higher off-price sales.

“NIKE’s ability to attack the opportunities that consistently drive growth over the near and long term is what sets us apart,” said Mark Parker, Chairman, President and CEO, NIKE, Inc. “With industry-defining innovation platforms, highly anticipated signature basketball styles and more personalized retail experiences on the horizon, we are well-positioned to carry our momentum into the back half of the fiscal year and beyond.”

Here’s a graph that looks at Nike’s price, consensus, and EPS surprise:

NIKE INC-B Price, Consensus and EPS Surprise

NIKE INC-B Price, Consensus and EPS Surprise | NIKE INC-B Quote

Nike’s principal business activity involves the design, development and worldwide marketing of high quality footwear, apparel, equipment, and accessory products. Nike is the one of the largest sellers of athletic footwear and athletic apparel in the world. The company sells its products to retail accounts in the United States and through a mix of independent distributors, licensees and subsidiaries in numerous countries around the world.

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