Rating: Buy
Nike Financial Health
Profitability:8.25/10
✅ Nike has better Profitability than 91.67% of the companies on the Manufacturing industry
Net Margin: 10.46%
✅ Nike has better Net Margin than 90.91% of the companies on the Manufacturing industry
ROE (Return on Equity): 11.79%
✅ Nike has better ROE (Return on Equity) than 90.91% of the companies on the Manufacturing industry
ROA (Return on Assets): 4.2%
✅ Nike has better ROA (Return on Assets) than 90.91% of the companies on the Manufacturing industry
Operating Efficiency:8.87/10
✅ Nike has better Operating Efficiency than 90.91% of the companies on the Manufacturing industry
Operating Margin: 29.73%
✅ Nike has better Operating Margin than 90.91% of the companies on the Manufacturing industry
Liquidity:7.44/10
✅ Nike has better Liquidity than 83.33% of the companies on the Manufacturing industry
Quick Ratio: 1.9
✅ Nike has better Quick Ratio than 83.33% of the companies on the Manufacturing industry
Operating Cash Flow Ratio: 0.54
✅ Nike has better Operating Cash Flow Ratio than 72.73% of the companies on the Manufacturing industry
Solvency:6.58/10
✅ Nike has better Solvency than 66.67% of the companies on the Manufacturing industry
Debt to Equity Ratio: 0.38
✅ Nike has better Debt to Equity Ratio than 90.91% of the companies on the Manufacturing industry
Interest Coverage Ratio: 0.54
✅ Nike has better Interest Coverage Ratio than 72.73% of the companies on the Manufacturing industry
Revenue by product
Revenue by location
Last quarter financial highlights
Revenues for the NIKE Brand were $10.1 billion (+10%), driven by growth across NIKE Direct and wholesale, key categories including Sportswear and the Jordan Brand, and continued growth across footwear and apparel.
Revenues for Converse were $555 million (+8%), mainly driven by double-digit growth in Asia and through digital globally, which was partially offset by declines in the U.S.
Gross margin increased 150 basis points to 45.7% primarily due to higher average selling prices and margin expansion in NIKE Direct, partially offset by impacts from changes in foreign currency exchange rates and higher product costs.
Selling and administrative expense increased 9% to $3.3 billion. Demand creation expense was $1.0 billion, up 6% primarily driven by higher advertising expenses and sports marketing investments. Operating overhead expense increased 10% to $2.3 billion driven by continued investments in transformational capabilities, particularly in NIKE Direct and global operations.
The effective tax rate was 12.4%, compared to 14% for the same period last year, primarily due to discrete items which favorably impacted the quarter.
Net income increased 25% to $1.4 billion driven primarily by strong revenue growth and gross margin expansion while diluted earnings per share increased 28% to $0.86 reflecting a 2% decline in the weighted average diluted common shares outstanding.
Share Repurchases: During the first quarter, Nike repurchased 11.9 million shares for approximately $995 million as part of the four-year, $15 billion program approved by the Board of Directors in June 2018. As of August 31, 2019, a total of 23.5 million shares had been repurchased under this program for approximately $2.0 billion.
What is Nike Joyride?
Nike Joyride joins Nike Air and Nike React as the latest proprietary innovation within the company's diverse array of cushioning platforms. Joyride is engineered to help keep legs fresh by delivering a personalized underfoot experience with great impact absorption in a surprisingly light, energy-returning package.
Nike Joyride was released globally on August 15, 2019.