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Nike (NKE) Bounces Back After Yesterday's Mixed Q4 Results

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Athletic apparel leader Nike Inc. (NKE - Free Report) reported earnings after the bell Tuesday for the fourth quarter of its fiscal year 2016. The results in the report were mixed, as too were reactions from investors, sending the company’s stock down nearly 7% at one point in after-market trading. NKE was able to somewhat bounce back on Wednesday though, as the stock was up over 3%.

Many are considering Nike’s results to be mixed, though it has been such a strong performer that many expect near perfection from the company. Nike was able to increase its streak of beating on earnings estimates to 16 consecutive quarters, posting EPS of $0.49, 2.08% higher than the Zacks Consensus Estimate of $0.48. Revenue figures came in lower than what was estimated though, as the company posted a figure of $8.24 billion, compared to the estimate of $8.26 billion, which marked the third consecutive quarter Nike did so.

Despite the revenue miss, Nike did post strong growth figures in several of its segments. On a currency-neutral basis, sales under its NIKE brand grew 8%, its direct-to-consumer (DTC) revenues grew 23%, and its Converse brand saw an increase of 18%. Nike Global Future orders scheduled for delivery between June ’16 and November ’16 grew 8%, or 11% on a currency neutral basis.

Despite its continuing growth, Nike does have several negatives that it is, and will continue to face moving forward. Foreign currency headwinds will likely continue to be a drag on the company, as its international sales continue to become a bigger part of its revenue stream, and events like the Brexit affect the strength of the U.S. dollar. Another issue that continues to grow for Nike is strict competition from the like of Adidas (ADDYY - Free Report) and Under Armour , who continue to successfully grow.


NIKE INC-B Price, Consensus and EPS Surprise

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

Bottom Line


Nike is currently a Zacks Rank #4 (Sell), and the company’s stock price is down around 12% year-to-date. Though Nike continues to grow, the company is beginning to face more hurdles than in past years, and the large amounts of growth it has seen may begin to slow. As its fiscal 2017 begins, Nike will need to continue to stay ahead of its competition that continually inching closer to the long time king of the industry.

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