It's certainly "March Madness" on the courts of the NCAA tournament -- between the Georgia State and University of Alabama at Birmingham victories alone, two 3-seeds were knocked out within the first four hours of its start on Thursday -- but for the company supplying many of the sneakers running around those courts, the madness is staying out of its stock market performance.
Nike reported $7.46 billion in third quarter revenue, up 7% year-over-year but slightly below the $7.6 billion analyst consensus. The company said that without the impact of foreign exchange rates, its revenue would have been up 13%. Net income for the quarter came in at $791 million, or 89 cents per share -- an earnings-per-share figure that beat the 84-cent Wall Street estimate and marks 19% growth year-over-year.
The footwear giant said that strong demand for Nike products was slightly offset by higher investment spending and a higher tax rate.
“Our strong third quarter results show that our growth strategies are working, even under challenging macroeconomic conditions,” Nike president and CEO Mark Parker said in a statement Thursday afternoon. “Nike has the ability to deliver consistent shareholder value due to the strength of our brand, our relentless commitment to innovation and our powerful portfolio that allows us to invest in the opportunities with the highest potential for growth as well as manage risk."
Within Nike's business segments, the Nike brand brought in $6.9 billion worth of sales during the quarter, up 6% year-over-year. The Converse brand recorded $538 million in third quarter sales, a 28% jump compared to its sales during the same time last year.
By the end of the quarter, futures orders for Nike shoes and athletic wear scheduled for delivery between March and July were 2% higher than they were this time last year, but Nike also noted that excluding currency changes, reported orders would have increased 11%.
"Nike has been benefiting lately from the popularity of basketball shoes as well as the athletic wear fashion trend," the analyst team at financial estimates service Estimize wrote in a recent research note. "Athletic wear performed incredibly well during the holiday season for many of Nike’s competitors, such as Under Armor, and for sporting apparel and goods retailers where Nike’s products are sold such as Dick’s Sporting Goods and
Following the release of the earnings results, shares of Nike -- which finished Thursday's regular trading session up 0.8% -- initially popped 1.5% in the after-hours trading session. The stock is currently up 0.8%; year-over-year the athletic giant is up more than 30%.
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