On Thursday, Sept. 21, Nike (NYSE:NKE) released Q1 2007 earnings for the period ended Aug. 31. Here's a summary of the high-level numbers that caused a major move in the stock price.
- Sales advanced 9% to $4.2 billion. Analysts applauded strong results in all major regions (U.S., Europe, Asia/Pacific, the Americas) and across most major product categories (footwear, apparel, equipment)
- Net income fell 13% to $377.2 million, while diluted earnings fell 9% to $1.47 per share. Most of the downfall came because Nike began expensing employee stock options.
- Nike continues to buy back a hefty portion of outstanding stock; it repurchased 6 million shares during the quarter for $476.7 million, completing a $1.5 billion buyback started back in June 2004. It also started a new $3 billion repurchase program approved in June 2006.
(Figures in thousands/millions, except per-share data)
Income Statement Highlights|
Avg. Est. |
Q1 2007 |
Q1 2006 |
Change | |
|---|---|---|---|---|
|
Sales |
$4,160 |
$4,194 |
$3,862 |
8.6% |
|
Net Profit |
-- |
$377 |
$432 |
(12.7%) |
|
EPS |
$1.42 |
$1.47 |
$1.61 |
(8.7%) |
|
Diluted Shares |
-- |
256 |
269 |
(4.7%) |
Get back to basics with a look at the income statement.
Margin Checkup|
Q1 2007 |
Q1 2006 |
Change* | |
|---|---|---|---|
|
Gross Margin |
44.09% |
45.26% |
(1.17) |
|
Operating Margin |
13.73% |
17.09% |
(3.36) |
|
Net Margin |
8.99% |
11.19% |
(6.45) |
Margins are the earnings engine. See how they work.
|
Assets |
Q1 2007 |
Q1 2006 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$1,725 |
$1,893 |
(8.9%) |
|
Accounts Rec. |
$2,569 |
$2,391 |
7.5% |
|
Inventory |
$2,134 |
$1,851 |
15.3% |
|
Liabilities |
Q1 2007 |
Q1 2006 |
Change |
|---|---|---|---|
|
Accounts Payable |
$868 |
$708 |
22.5% |
|
Long-Term Debt |
$380 |
$428 |
(11.2%) |
Learn the ways of the balance sheet.
Cash Flow Highlights
Nike tripped on its laces here, neglecting to include a cash flow statement in the release. First-quarter cash flow information will be available as soon as Nike follows up with its SEC 10-Q form for the quarter.
Find out why Fools always follow the money.
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Fool contributor Ryan Fuhrmann is long shares of Nike, but has no financial interest in any other company mentioned. Feel free to email him with feedback or to further discuss any companies mentioned. Deckers Outdoor is a Motley Fool Hidden Gems recommendation. The Fool has an ironclad disclosure policy .
