Nike pushes into Yoga


Nike has taken Lululemon head on with a yoga clothing line. But they have done it in a somewhat sneaky way, calling yoga a "secret workout weapon" which prepares athletes for the usual Nike activities such as running and NFL.


Nike Weathers the Trade Wars


We are watching carefully to see what the impact of Trump's trade war with China is, on our portfolio of companies. We are especially worried that companies like Nike may be hard hit. They sell lots of goods in China, and manufacture them there too. Will sales slump? Will supply systems get disrupted by tariffs?


The impact of Nikes campaign


This image from StockTwits is fascinating. It shows the number of product lines sold out on Nike's online site before and after the Kaepernick ad. Before the ad, 703 items were out of stock. After the ad, that shot up 61% to 1131. Genius.


Nike's restructuring years


A few years ago Nike went through a transition period, and it was showing in their numbers. Third party retailers were taking heat and investors were concerned that the apparel business was going through a slump. But that was not the case.


Nike FY numbers - Growth all round


Last week, Nike had results that pushed their share price to record highs. The main reason for the stock price pop, was because North America returned to growth, after three-quarters of declines. North America is 40% of Nike's total sales, so it is a significant region. I do feel though, that US based analysts sometimes forget that there is a world beyond the Mexican wall Pacific Ocean. We saw it with Netflix, the share price would move purely on US subscriber numbers, even though international subscribers were multiplying. The Netflix share price only took off after it become clear that the international market was going to eclipse the US market.


Nike 1Q numbers - Rev flat, profits down


Last week we had 1Q numbers from Nike, which missed analyst estimates at the top line but beat on the bottom line. Here is the press release from the company, Nike, Inc. Reports Fiscal 2018 1Q Results . Here are the headline numbers, revenue of $9.07 billion up 0.1% from $9.06 billion and EPS of $0.57 down 22% from 0.73%. A big reason for the drop is due to their effective tax rate going from 2.5% to 11.4%; as you can see much lower than the 35% US tax rate thanks to all the deductions allowed.


Nike FY numbers - beating expectations


Nike reported results last evening, they are a little out of sync with the rest of the businesses that we own. These numbers are for their fourth quarter to end 31 May, a strange financial year end in any place. There certainly are no governments that run their fiscal year to end May. It must have been something about starting the financial year at the beginning of the North American summer, when athletes and enthusiasts get back on the road. Perhaps I will email them and ask them why this is the case.


Nike 3Q numbers - beat on bottom line, miss on top


Nike, the footwear and sports apparel company, perhaps the best known of all of them, alongside competitors like Puma, Adidas (experiencing a renaissance) and more recently Under Armour, reported results last evening that beat on the bottom line handsomely. Unfortunately the top line was not within expectations, once again fuelling the naysayers who are predicting a slow down globally in their brand. This investment theme is a firm favourite here at Vestact, the thesis being that more and more people are active and are taking their exercising more seriously. The rise of awareness and linkage of dread diseases to sedentary behaviour has prompted many to take up exercise. i.e. My body is my temple, that whole theme, right!


Better 2Q numbers, less anxiety


Nike reported numbers last evening, for their second quarter, after the bell had rung for the close. It was a beat by most metrics that matter for folks that look at the headlines. I learned something new (which is always a good thing) yesterday, the chief executive, who is essentially a Nike lifer, Mark Parker was on the design team with Tinker Hatfield. So? Both of them actually were considerably good track athletes at university (college), where Tinker actually held the pole vault record at University of Oregon, where he was coached by Phil Knight's mentor and co-founder of Nike, Bill Bowerman.


Nike 1Q numbers - strong earnings


Nike no friends. After regular market hours, that is. The biggest sports apparel and sports shoes manufacturer in the western world, and one of the most recognisable brands across the globe, reported numbers last evening for the first quarter of their financial year 2017. At face value they actually look quite good, revenues up 8 percent to 9.1 billion, in constant currencies sales were up 10 percent. Diluted earnings per share clocked 73 cents, up 9 percent when compared to the prior financial year. Here is the reason for Mr. Market being disappointed however, future orders worldwide were only up 5 percent, 7 percent in constant currencies. Here is the thing, Nike touts themselves as a growth company, and whilst I firmly believe that to be true, the company needs to deliver growth in the low to mid teens if they are going to continue to attract a premium multiple to the market.


Nike FY numbers - growth slowed


Nike. This is a company that has just been doing it for a while now, both revenues and profits have been growing sharply, leading to a big earnings multiple expansion and with that a rapidly appreciating share price. Share holders have become used to the idea that the stock has just grown as global and in particular, North American sales have consistently been above expectations. In fact, if you visit the Investor Relations landing page of their website, there is Cristiano Ronaldo running away from the crumbling defence, some figurines exploding. And in bold letters there, it states that Nike is a growth company.


Nike 2Q numbers - Blazing growth in China


Nike did it last night. Nike have been doing it since January 1964. That is over 50 years of doing it. The name change from Blue Ribbon Sports to the name we know today took place in 1971. Bill Bowerman (co-founder) was Phil Knight's coach. Phil Knight had a personal best of 4 minutes and ten seconds for a mile, that is no mean feat! Bowerman was a spectacular coach, and according to Wikipedia, trained 31 Olympic athletes. As well as 16 folks that managed to go under 4 minutes for the mile, the holy grail of middle distance. As Wiki points out, if you do the math, under 4 minutes for a mile means that you are moving at 24.14 km per hour, or 14.91 seconds per 100 metres. The current record for that distance, the mile, belongs to legendary athlete Hicham El Guerrouj of Morocco, who ran 3.43.13 for that distance in 1999.


Nike stock split and buyback


Nike had a big announcement last evening, sending the stock up over three and a half percent in the aftermarket. Why, what, where? The release tells you everything: Nike, inc. announces new $12 billion share repurchase program, 14 percent increase in quarterly dividend and two-for-one stock split. The current 8 billion Dollar repurchase program will finish in fiscal year 2016, that is when the next one will start. This is a pretty aggressive buyback by historic standards, the release quotes CEO Mark Parker (not related to Spiderman) as saying the company has returned 23 billion Dollars to shareholders over 14 years.


Nike 1Q results


Nike, one of the core Vestact recommended stocks reported numbers last evening, this was for the first quarter of their 2016 financial year. On a currency neutral basis sales increased 14 percent, up 5 percent in Dollar terms to 8.4 billion Dollars. Diluted earnings per share clocked 1.34 Dollars, up an astonishing 23 percent, due to higher gross margins, lower tax rates and most importantly a reflection of stronger revenues. Future orders in Dollars up 9 percent, excluding currency changes, up 17 percent. Yip, this is certainly, as their landing page of their investor relations says, a growth business. Tick that box! That is corny.


Nike 4Q and Full year results


Last week Nike released solid fourth quarter and full year earnings which comfortably beat estimates, pushing the stock up 5% on Friday. Fiscal year revenues were up 10% to $30.6bn, this was up 14% if you exclude currency movements. Diluted earnings were up 25% to $3.70 per share for the year thanks to improving margins, share buy backs and of course solid sales growth.


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