NIKE has reported fiscal 2020 financial results for its fiscal first quarter ended August 31, 2019. Revenue increased to US$10.7 billion in the quarter, up 7% on a reported basis and up 10% on a currency-neutral basis, ‘driven by growth across all geographies’.
“Our strong start to FY20 highlighted the depth and balance of NIKE’s complete offense,” said Mark Parker, Chairman, President and CEO of NIKE. “NIKE’s strong product innovation, combined with our industry-leading digital experiences, continue to deepen our consumer relationships around the world.”
Andy Campion, Executive Vice President and Chief Financial Officer at NIKE added, “Our targeted strategic investments are accelerating NIKE’s digital transformation and extending our competitive advantage.
“Even amidst the increasingly volatile macroeconomic and geopolitical environment, we expect our unrelenting focus on better serving the consumer to continue fuelling strong, broad-based growth across our global portfolio.”
Revenues for the NIKE Brand were US$10.1 billion, up 10% on a currency-neutral basis – 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 US$555 million, up 8% on a currency-neutral basis, mainly driven by double-digit growth in Asia and through digital globally, which was partially offset by declines in the US.
Gross margin increased 150 basis points to 45.7% primarily due to higher average selling prices and margin expansion in NIKE Direct. This was partially offset by impacts from changes in foreign currency exchange rates and higher product costs.
Diluted earnings per share for the quarter was US$0.86, an ‘increase of 28% driven primarily by strong revenue growth and gross margin expansion’.
Inventories for NIKE were US$5.8 billion, up 12% compared to the prior year period. The company added that this reflects ‘strong consumer demand globally, and to a lesser extent, the impact from changes in foreign currency exchange rates.’
During the first quarter, NIKE repurchased 11.9 million shares for approximately US$995 million as part of the four-year, US$15 billion share repurchasing program approved by the company’s 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 US$2.0 billion.