Nike (NKE, Financial) reported its second quarter 2015 earnings on Thursday, December 18. The sports apparel manufacturing company posted sales revenue of $7.4 billion with net income of $655 million and earnings per share of $0.74.
The second quarter of 2015 was a good quarter for Nike. Revenue, net income and earnings per share were all higher on a quarter-over-quarter and six month basis. Quarter-over-quarter, sales revenue was 15% higher, net income was 23% higher and earnings per diluted share increased 25%. On a six month basis, sales revenue was 15% higher at $15.4 billion, net income was 23% higher at $1.62 billion and diluted earnings per share gained 27% to $1.83.
The second quarter balance sheet showed inventories for the company of $4.15 billion, up 11% from the second quarter of 2014. The company also reported a 7% increase in future orders for December 2014 through April 2015 for Nike footwear and apparel.
Management noted its strength in athlete promotional products and its ecommerce business. Basketball and the women’s business were also two key growth drivers for the quarter.
Globally, the company continued to do well. Sales growth was seen in its major markets with some concern shown for the emerging markets which came in slightly below future order expectations.
In the second quarter, management increased Nike’s stock dividend to $0.28 from $0.24. The company’s stock return has continued to remain strong with the stock trading at $94.84 in the day following the announcement. Year to date Nike’s stock value has increased 20.6%.
As core sales growth continues with strong growth prospects seen across all global channels the company continues to remain at a buy rating by most analysts. It has a discounted cash flow value of $104.99 with a comparable high average target price by analysts of $115, giving it substantial upside potential going into the third quarter of the fiscal year for the company.
