Expand / Collapse search
Watch TV
Menu

This material may not be published, broadcast, rewritten, or redistributed. ©2024 FOX News Network, LLC. All rights reserved. Quotes displayed in real-time or delayed by at least 15 minutes. Market data provided by Factset. Powered and implemented by FactSet Digital Solutions. Legal Statement. Mutual Fund and ETF data provided by Refinitiv Lipper.

story

Nike Q1 Profit Beats Forecasts

By Reuters
Published | Updated

CHICAGO – Nike Inc. (NKE), the world's largest athletic shoe maker, posted a bigger-than-expected 32 percent jump in quarterly profit on Monday on strong sales in the key U.S. footwear market, pushing its stock higher.

The robust sales marked a turnaround from last quarter, when Nike reported its slowest revenue rise in nine quarters, prompting worry on Wall Street. Nike said orders for delivery through January were up 11 percent from a year earlier, and it was optimistic about its growth prospects.

The company earned $432.3 million, or $1.61 per share, in the fiscal first quarter ended August 31, compared with $326.8 million, or $1.21 per share, a year earlier.

Analysts, on average, had expected $1.42 per share, according to Reuters Estimates.

Shares of Nike rose 3.8 percent to $81.50.

Revenue rose 8 percent to $3.9 billion, helped by an 11 percent gain in the U.S. athletic footwear business and 8 percent growth in total U.S. sales, including apparel and other merchandise. Analysts had expected revenues of $3.8 billion, according to Reuters Estimates.

In Europe, revenue rose 5 percent, while the Asia Pacific region reported a 13 percent increase. The weak dollar boosted the value of overseas sales.

Last quarter, the U.S. market was particularly weak, showing just a 3 percent overall revenue gain and a 7 percent increase in U.S. athletic footwear sales, so analysts were eager to see improvement there. Nike shares are down 12 percent since late June, when the disappointing fourth-quarter results were released.

The company has benefited from strong demand for premium shoes like the Shoxx running shoe, and it recently bought the Starter brand of lower-priced shoes that are sold by Wal-Mart Stores Inc. (WMT), giving it access to a broader market.

Competition is likely to stiffen in the vital U.S. market because Germany's Adidas-Salomon agreed last month to buy Reebok International Ltd. (RBK), a move that analysts said was aimed at boosting Adidas' U.S. position.

Reebok's shares, which surged following news of the Adidas deal, now trade at 16.3 times next year's estimated earnings, a premium to Nike's 15.5, according to Reuters Estimates.

Nike said orders for footwear and apparel for delivery through January totaled $4.9 billion, including a 12 percent increase in U.S. orders.