Nike Rounds the Second Quarter: Fool by Numbers

On Dec. 20 after the market closed, Nike (NYSE: NKE  ) released fiscal 2007 second quarter earnings for the period ended Nov. 30.

  • Sales grew 10% to $3.8 billion, driven by new product introductions and strength in Asia.

  • Total diluted earnings grew 12.3%, with $0.13 from a retroactive Dutch tax benefit. Management also repurchased $126 million of common stock, reducing shares outstanding.

  • Inventory growth outpaced sales expansion, growing 14.5%.

  • In Motley Fool CAPS, 204 of 231 community members believe that Nike will outperform the S&P 500. Share your thoughts by participating in CAPS.

(Figures in millions, except per-share data)

Income Statement Highlights

Q2 2007

Q2 2006

Change

Sales

$3,822

$3,475

10.0%

Net Profit

$326

$301

8.1%

EPS

$1.28

$1.14

12.3%

Diluted Shares

254

264

(3.8%)

For the three months ended Nov. 30, 2006, and Nov. 30, 2005.

Get back to basics with a look at the income statement.

Margin Checkup

Q2 2007

Q2 2006

Change*

Gross Margin

43.36%

43.50%

(0.14)

Operating Margin

11.70%

13.35%

(1.65)

Net Margin

8.52%

8.67%

(0.15)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q2 2007

Q2 2006

Change

Cash + ST Invest.

$1,907

$2,055

(7.2%)

Accounts Rec.

$2,388

$2,166

10.2%

Inventory

$2,167

$1,893

14.5%



Liabilities

Q2 2007

Q2 2006

Change

Accounts Payable

$880

$744

18.3%

Long-Term Debt

$384

$408

(6.1%)



Learn the ways of the balance sheet.

Cash Flow Highlights
Fools will have to wait until Nike files its quarterly 10-Q for juicy cash flow details.

Find out why Fools always follow the money.

Comparable Companies:

  • K-Swiss (Nasdaq: KSWS  )
  • Steve Madden (Nasdaq: SHOO  )
  • Skechers (NYSE: SKX  )

Related Foolishness:

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Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so checkFool.com for more of our in-depth discussion of what the numbers mean.

Fool contributor Ryan Fuhrmann is long shares of Nike but has no financial interest in any other company mentioned. The Fool has an ironclad disclosure policy. Feel free to email him with feedback or to discuss any companies mentioned further.


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