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Nike's Q4 Earnings: Despite Growth, Currency Headwinds Remain An Issue

Nike's Q4 Earnings: Despite Growth, Currency Headwinds Remain An Issue
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Nike Inc (NYSE: NKE) closed its fiscal year 2016 after releasing Q4 earnings. Nike beat analyst's estimates on earnings by 0.01 per share, coming in at $0.49 per share. Revenue came in at $8.24 billion, $40 million shy of consensus estimates.

The sportswear leader is feeling the heat of the revenue miss as the stock was down nearly 7 percent after hours. Nike had a solid quarter, but is still facing significant currency headwinds. The company also announced its plan to increase the Jordan brand across several new categories. Jordan brand is now a $2.7 billion business.

Nike brand revenue grew 8 percent, while its direct-to-consumer sales grew 23 percent, including 51 percent growth online.

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Nike's Results in FY 2016 by Geography:

  • North America – +8 % currency neutral basis
  • Western Europe - +14% currency neutral basis
  • Central and Eastern Europe - +17% currency neutral basis
  • Emerging Markets - +13% currency neutral basis
  • Greater China - +27% currency neutral basis
  • Japan - +22% currency neutral basis

Nike is coming off its impressive NBA Finals with key endorsers Kyrie Irving and LeBron James taking home the championship. The Lebron Soldier 10 model that he wore during the Finals is seeing "incredible sell through," according to the company. Irving's exceptional performance also has the company very excited about the future of the business.

"Overall we continue to feel great about the basketball business, we have a 2% increase in the fiscal year. Energy for basketball is at an all time high. Sell through continues to pick up, the Kyrie and Kobe models did exceptionally well," said Nike during the call.

The company maintained its guidance for fiscal year 2017, with reported revenues at a "high single digit rate" on a currency neutral basis. Despite the uncertainty surrounding the global macro environment and huge currency fluctuations, Nike remains confident moving into 2017.

Shares traded recently at $51.60, down 2.8 percent.

Posted-In: Jordan brand LeBron JamesEarnings News Guidance After-Hours Center Best of Benzinga


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