Nike Inc (NYSE:NKE) is having an incredible time in pre-market trading today after announcing earnings after the closing bell yesterday. Ultimately, earnings beat expectations, causing investor excitement and leading to incredible gains. Today, we’ll take a look at the earnings report, how investors reacted to the news and what we can expect to see from NKE moving forward.
Nike Earnings Come In Ahead Of Expectations
As expected, NKE released its earnings report for the second quarter of fiscal 2016 yesterday after the closing bell. While earnings came in ahead of expectations, revenue was a bit of a miss. Here’s what we saw from the earnings report…
- Earnings Beat Expectations – In the case of earnings, NKE did incredibly well. During the quarter, the company generated $0.90 per share in earnings. This beat estimates of $0.86 per share by $0.04.
- Revenue Is A Miss – Unfortunately, revenue wasn’t as positive as expected. In the quarter, NKE generated revenue in the amount of $7.69 billion. While this did prove to be a year over year growth of 4%, the figure missed analyst expectations of $7.81 billion.
While earnings was a miss, overall, the report was positive. In a statement, Mark Parker, CEO of NKE had the following to offer…
“Our strong Q2 growth and profitability show that Nike continues to drive real momentum through the category offense – by going deep with consumers by sport and serving them completely… and our powerful global portfolio of businesses, combined with strong financial discipline, continue to drive significant shareholder value…”
How The Market Is Reacting To The News
Earnings just about always prove to be a catalyst. Whether it be positive or negative, earnings tend to cause market movement. In this case, investors are clearly excited with regard to what they saw from NKE. Currently (8:07), the stock is trading at $135.25 after a gain of 2.63% so far today.
What We Can Expect To See From NKE Moving Forward
Moving forward, I have a relatively bullish opinion with regard to what we can expect to see from Nike. In the recent report, we found out that overall Nike sales were climbing in the most important markets. In China, arguably the most important market, Nike sales climbed by 24%. In North America, sales were up by 9%. Unfortunately, in Western Europe, sales fell by 1% and in Central and Eastern Europe, sales fell by 6%. Nonetheless, these declines are to be expected considering poor economic conditions we’re seeing in Europe at the moment. Ultimately, Nike is making the right moves in the right areas, leading to solid gains in earnings and investor excitement. As a result, there’s little reason to expect declines any time soon.