Nike Inc shares surge on 'fantasic quarter'
"In no uncertain terms, Nike is firing on all cylinders."
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If you were waiting for a disappointment from Nike Inc. before buying the stock, you’re probably kicking yourself right now.
Shares of the athletic apparel maker rose more than 10% on Friday after the company reported an impressive US$1.09 in EPS for Q1, beating the average analyst estimate of US88¢, along with increasing its full-year guidance.
The beat was driven by strong sales as footwear surged more than 18%, greater gross margin expansion, lower expenses and a lower tax rate.
“In no uncertain terms, Nike is firing on all cylinders, especially in higher-margin categories and regions,” Canaccord Genuity analyst Camilo Lyon told clients. “Overall, this was a fantastic quarter.”
He noted that World Cup, running and basketball sales were solid, while the women’s category is also growing at a healthy pace due to an improved premium assortment and increasing shelf space at key retailers.
Revenues from China rose 20% as comparable same-store sales grew 30%, while Mexico and Brazil stood out as underperformers among emerging markets.
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