Nike's Second-Quarter Results Were A Mixed Bag; Valuation Unchanged
By Valuentum:
Nike (NKE) posted fiscal second-quarter results, which, by most measures, was in line with our expectations. Top line revenue grew 18%, thanks to both slightly higher prices and impressive unit growth. North America, easily Nike’s biggest market, saw footwear soar 22% and apparel rise by 23%, both positive upside surprises, in our view. We also saw strength in China (up 35%) and Emerging Markets (up 27%). Though sales in Europe have languished over the past several quarters, Western Europe didn’t experience a large downturn. However, management stated its business isn’t a great gauge of the European consumer due to Euro 2012 and the London Olympics scheduled for the next year. We are maintaining our fair value estimate for Nike at this time. Though sales in most segments showed solid improvement, earnings growth was not nearly as impressive. Gross margins fell well over 200 basis points to 42.7%, their lowest marginsComplete Story »
- Original article
- Login or register to post comments
