Nike's Q2 Earnings Rise, Plans Cost Savings

Nike, Inc. recently reported its financial results for the second quarter of the fiscal year. The company posted quarterly earnings of $1.03 per share, a 21.18% increase from the same period last year when earnings were 85 cents per share. The company's revenue for the quarter ended November 2023 was $13.39 billion, a slight increase of 0.6% from $13.32 billion a year earlier.

The company's gross margin also saw an improvement, increasing 170 basis points to 44.6%. This growth was attributed to strategic pricing actions and lower ocean freight rates. However, it was partially offset by changes in net foreign currency exchange rates and higher product input costs. Nike's board approved a quarterly cash dividend of 37 cents per share, which represents a 9% increase compared to the company's prior quarterly dividend of 34 cents per share.

In terms of future plans, Nike is assessing opportunities to deliver up to $2 billion in cumulative cost savings over the next three years. The company anticipates pre-tax restructuring charges of approximately $400 million to $450 million from its streamlining efforts, which are in the early stages.

Several analysts have provided ratings for Nike, with varying price targets. For instance, Raymond James analyst Rick Patel maintained an Outperform rating and increased the price target from $121 to $130. Williams Trading analyst Sam Poser upgraded the stock from Sell to Hold and increased the price target from $91 to $92. The mean target price among analysts is around $126.