Nike’s exceptional quarterly earnings sent its stock price higher by 13%. The results triggered similar reactions to other retail stocks as Nike’s growth led to analysts upgrading forecasts for the retail industry.
Nike, listed on the New York Stock Exchange (NYSE) under the ticker NKE, delivered its fiscal Q4 2021 and full year results. The earnings exceeded even the wildest expectations, sending the company’s share price on a tear higher.
A dividend-paying company, Nike needs no introduction. Its strong brand name is known worldwide and investors are thrilled to find out that it found a way to navigate through the COVID-19 pandemic successfully.
The financial results are nothing short of impressive. Revenues, for instance, grew 96% when compared to the same period last year. Even the gross profit margin increased on the back of a bigger increase in revenues when compared to the increase in selling and administrative expenses.
A Detailed Look at Nike’s Last Quarter of the 2021 Fiscal Year
Innovation and investment in the digital space led to Nike’s fabulous earnings for the fourth quarter of its fiscal year. Revenues were $12.3 billion, up 21% when compared to the fourth quarter of 2019 and +96% when compared to the fourth quarter of 2020. This is an important aspect because many would be inclined to say that the revenue growth is due to poor sales in 2020 due to the pandemic, but Nike’s revenue has exceeded its pre-pandemic equivalent quarter, too.
Higher wholesale shipments were decisive for Nike’s revenue and earnings for the last quarter. A new financial model led by digital transformation is responsible for the quarter’s performance.
The biggest take-away from the quarterly earnings is that revenue growth outpaced selling and administrative expenses – 96% vs. 17%. Hence, profitability increased, the dividend-paying outlook capability remains positive, and forward guidance improved as a consequence.
Nike’s share price is up over 500% in the last decade, 154% in the last five years, and 33.49% in the last twelve months. The company has a dividend payout ratio of 28.49% and an 11.53% five-year dividend growth rate.