Mature Stock Delivering Double-Digit Top-Line Growth
Mitchell Clark: One company that continues to distinguish itself with its excellent long-term performance, both operationally and on the stock market, is NIKE, Inc. (NYSE:NKE). It’s a good company that’s worthy of consideration by long-term investors.
The position is trading right at its all-time high and it recovered from its latest price retrenchment to around the $70.00-per-share level. It’s an early reporting issuer, and the company just reported its fiscal third-quarter financial results of 2014.
Last quarter, NIKE’s numbers were excellent. Second-quarter revenues advanced eight percent comparatively to $6.4 billion. The company owns the “Converse” brand, and its second-quarter sales grew 11% to $360 million.
Net income was $537 million, up four percent on an earnings-per-share (EPS) basis. The company bought back 5.5 million of its own common shares in the second quarter for $402 million.
In its last earnings report, management said that global future orders of NIKE-branded footwear and apparel for delivery between December 2013 and April 2014 were running 12% higher than last year’s.
It looks like this forecast came to fruition because the company’s latest numbers hit the mark. NIKE’s 10-year stock chart is featured below:
Chart courtesy of www.StockCharts.com
The company’s share price moved higher again after announcing fiscal third-quarter sales from continuing operations of $7.9 billion, up a solid 13% over the same quarter of the previous year.
Revenues from NIKE-branded products grew 14% to $6.6 billion, and Converse sales grew 16% to $420 million. Notably, the company’s gross margin expanded 30 points to 44.5% due to higher average selling prices, offset by adverse foreign exchange translation.
Bottom-line earnings grew three percent to $685 million, with diluted earnings per share growing four percent to $0.76.