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Category: Nike (NKE)
Date: 28 June 2021 Stock price of Nike (NKE): $154.35 Market Capital of Nike (NKE): $243.9 billion Overview of Nike Inc (NKE) 4th quarter 2021 earnings report. Nike is one of the most valuable brands in the world and one of the largest clothing and apparel brands in the world. For the quarter the group reported revenues of $12.3 billion and net income of $1.51 billion
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NIKE’s brand momentum is a testament to our authentic consumer connections, digital strength and continued operational execution- Matt Friend, Executive Vice President and Chief Financial Officer, NIKE, Inc. "
More About Nike Inc (NKE)
NIKE, Inc., based near Beaverton, Oregon, is the world’s leading designer, marketer and distributor of authentic athletic footwear, apparel, equipment and accessories for a wide variety of sports and fitness activities. Converse, a wholly-owned NIKE, Inc. subsidiary brand, designs, markets and distributes athletic lifestyle footwear, apparel and accessories.
Overview of Nike (NKE) 4th quarter 2021 earnings report
Fourth Quarter Income Statement Review
- Revenues for NIKE, Inc. rose 96 percent to $12.3 billion, up 88 percent on a currency-neutral basis, largely driven by the recovery of our business operations due to the impact of COVID-19 in the prior year.
- Revenues for the NIKE Brand were $11.8 billion, up 88 percent to prior year on a currencyneutral basis, driven by triple-digit growth in our wholesale business and strong double-digit growth in NIKE Direct.
- Revenues for Converse were $596 million, up 85 percent on a currency-neutral basis, led by strong marketplace demand in North America and Western Europe.
- Gross margin increased 850 basis points to 45.8 percent, primarily due to annualizing the impacts of COVID-19 including lower factory cancellation charges, lower inventory obsolescence reserves as well as the favorable rate impact of supply chain fixed costs on a higher volume of wholesale shipments. The increase in gross margin also reflects favorable margins in our NIKE Direct business.
- Selling and administrative expense increased 17 percent to $3.7 billion. ◦ Demand creation expense was $997 million, up 21 percent, primarily due to the return of sport and brand events driving increased advertising and marketing expense as well as digital marketing investments.
- Operating overhead expense increased 16 percent to $2.7 billion, due to an increase in wage-related expenses, higher strategic technology investments and NIKE Direct variable costs, partially offset by lower bad debt expense.
- The effective tax rate was 18.6 percent compared to 1.7 percent for the same period last year, caused by a change in the proportion of earnings taxed in the U.S. related to recovery from the impact of COVID-19 and decreased benefits from discrete items.
- Net income was $1.5 billion, and Diluted earnings per share was $0.93 compared to a net loss for the fourth quarter of 2020 of $790 million and a net loss per share of $0.51.
Nike (NKE) management commentary 4th quarter 2021 earnings report
BEAVERTON, Ore., June 24, 2021 — NIKE, Inc. (NYSE:NKE) today reported financial results for its fiscal 2021 fourth quarter and full year ended May 31, 2021.
“NIKE’s strong results this quarter and full fiscal year demonstrate NIKE’s unique competitive advantage and deep connection with consumers all over the world,” said John Donahoe, President & CEO, NIKE, Inc. “FY21 was a pivotal year for NIKE as we brought our Consumer Direct Acceleration strategy to life across the marketplace. Fueled by our momentum, we continue to invest in innovation and our digital leadership to set the foundation for NIKE’s long-term growth.”
* Our fourth quarter revenue growth was led by higher wholesale shipments due to the annualization of COVID-19 related physical retail closures in the prior year in North America, EMEA and APLA. As physical retail re-opened, NIKE Brand Digital continued to deliver strong revenue growth of 41 percent versus prior year and 147 percent compared to the fourth quarter of 2019. North America delivered record revenues, up 141 percent on a reported basis for the fourth quarter, up 29 percent compared to the fourth quarter of 2019, including increased wholesale revenue due to delayed shipments from the previous quarter. As markets re-opened and sport returned, North America Digital growth continued to be strong, increasing 54 percent versus prior year and 177 percent compared to the fourth quarter of 2019. EMEA’s fourth quarter reported revenues increased 124 percent, up 21 percent compared to the fourth quarter of 2019, despite temporary COVID-19 related store closures throughout the quarter. As physical retail was temporarily closed, EMEA Digital fourth quarter sales increased 40 percent, or 170 percent compared to the fourth quarter of 2019. Today, approximately 99 percent of stores in EMEA are open or operating on reduced hours.
Our full year NIKE, Inc. revenues increased 19 percent on a reported basis or 14 percent compared to fiscal year 2019, reflecting growth across all Geographies and Converse, including seven consecutive years of double-digit, currency-neutral** growth for our Greater China business. “NIKE’s brand momentum is a testament to our authentic consumer connections, digital strength and continued operational execution,” said Matt Friend, Executive Vice President and Chief Financial Officer, NIKE, Inc. “As we advance our consumer-led digital transformation, we are building a new financial model that will continue to fuel long-term sustainable, profitable growth for NIKE.”
- Fourth quarter reported revenues were $12.3 billion, up 96 percent compared to prior year and increasing 21 percent compared to the fourth quarter of 2019.
- Full year reported revenues increased 19 percent to $44.5 billion.
- NIKE Direct fourth quarter sales increased 73 percent to $4.5 billion.
- Gross margin for the fourth quarter increased 850 basis points to 45.8 percent.
- Diluted earnings per share for the fourth quarter was $0.93 and for the full year was $3.56.
“NIKE’s strong results this quarter and full fiscal year demonstrate NIKE’s unique competitive advantage and deep connection with consumers all over the world,” said John Donahoe, President & CEO, NIKE, Inc. “FY21 was a pivotal year for NIKE as we brought our Consumer Direct Acceleration strategy to life across the marketplace. Fueled by our momentum, we continue to invest in innovation and our digital leadership to set the foundation for NIKE’s long-term growth.”
* Our fourth quarter revenue growth was led by higher wholesale shipments due to the annualization of COVID-19 related physical retail closures in the prior year in North America, EMEA and APLA. As physical retail re-opened, NIKE Brand Digital continued to deliver strong revenue growth of 41 percent versus prior year and 147 percent compared to the fourth quarter of 2019. North America delivered record revenues, up 141 percent on a reported basis for the fourth quarter, up 29 percent compared to the fourth quarter of 2019, including increased wholesale revenue due to delayed shipments from the previous quarter. As markets re-opened and sport returned, North America Digital growth continued to be strong, increasing 54 percent versus prior year and 177 percent compared to the fourth quarter of 2019. EMEA’s fourth quarter reported revenues increased 124 percent, up 21 percent compared to the fourth quarter of 2019, despite temporary COVID-19 related store closures throughout the quarter. As physical retail was temporarily closed, EMEA Digital fourth quarter sales increased 40 percent, or 170 percent compared to the fourth quarter of 2019. Today, approximately 99 percent of stores in EMEA are open or operating on reduced hours.
Our full year NIKE, Inc. revenues increased 19 percent on a reported basis or 14 percent compared to fiscal year 2019, reflecting growth across all Geographies and Converse, including seven consecutive years of double-digit, currency-neutral** growth for our Greater China business. “NIKE’s brand momentum is a testament to our authentic consumer connections, digital strength and continued operational execution,” said Matt Friend, Executive Vice President and Chief Financial Officer, NIKE, Inc. “As we advance our consumer-led digital transformation, we are building a new financial model that will continue to fuel long-term sustainable, profitable growth for NIKE.”
Nike Inc (NKE) stock price chart over the last 5 years
The image below shows the stock price chart of Nike (NKE) over the last 5 years. And its been a good time for Nike stockholders with the stock increasing sharply by 170.8% over the last 5 years.
The stock of Nike Inc (NKE) is trading at closer to its 52 week high than it is to its 52 week low which is a clear indication that the short term sentiment and momentum of Nike Inc stock is very positive at this point in time.
The stock of Nike Inc (NKE) is trading at closer to its 52 week high than it is to its 52 week low which is a clear indication that the short term sentiment and momentum of Nike Inc stock is very positive at this point in time.
Latest stock valuation of Nike Inc (NKE)
So what is Nike (NKE) stock worth based on their 4th quarter 2021 earnings report? Based on their earnings report our valuation model provides a target price (full value price) for Nike stock at $90 a stock
We therefore believe the stock of Nike (NKE) is overvalued at its current price of $154.35
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price), which in this case is $90 thus a good entry point into Nike stock would be at $81 or below.
We expect the stock of Nike (NKE) to pull back strongly from current levels in coming weeks and months to levels closer to our target price (full value price), as their stock is price is overvalued
We therefore believe the stock of Nike (NKE) is overvalued at its current price of $154.35
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price), which in this case is $90 thus a good entry point into Nike stock would be at $81 or below.
We expect the stock of Nike (NKE) to pull back strongly from current levels in coming weeks and months to levels closer to our target price (full value price), as their stock is price is overvalued
Next earnings release of Nike Inc (NKE)
It is expected that Nike Inc will release their 1st quarter 2022 earnings report in late September 2021
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