The 10-second takeaway
For the quarter ended Feb. 29 (Q3), Nike met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded significantly, and GAAP earnings per share expanded.
Margins shrank across the board.
Nike recorded revenue of $5.85 billion. The 15 analysts polled by S&P Capital IQ anticipated net sales of $5.83 billion on the same basis. GAAP reported sales were 15% higher than the prior-year quarter's $5.08 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $1.20. The 18 earnings estimates compiled by S&P Capital IQ predicted $1.17 per share. GAAP EPS of $1.20 for Q3 were 11% higher than the prior-year quarter's $1.08 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 43.8%, 200 basis points worse than the prior-year quarter. Operating margin was 13.0%, 60 basis points worse than the prior-year quarter. Net margin was 9.6%, 70 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $6.54 billion. On the bottom line, the average EPS estimate is $1.38.
Next year's average estimate for revenue is $24.21 billion. The average EPS estimate is $4.94.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 2,104 members rating the stock outperform and 124 members rating it underperform. Among 646 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 623 give Nike a green thumbs-up, and 23 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Nike is outperform, with an average price target of $108.24.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of and creating a diagonal call position in Nike. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.