Nike Shares Hit an All-Time High
September 25 2019 - 11:42AM
Dow Jones News
By Dave Sebastian
Shares of Nike Inc. opened at an all-time high on Wednesday as
the footwear and apparel company reported better-than-expected
sales for its latest quarter driven by China.
Nike shares were up 5.3% on Wednesday morning with shares
trading at $91.76. The stock opened at $91.78.
On Tuesday, the Beaverton, Ore., company said sales rose 7% in
the latest quarter from a year earlier, with Greater China revenue
climbing 22% to $1.68 billion despite trade tensions with the U.S.
The boost trailed that of the company's fourth-quarter results in
June, showing the China region's strength as a growth driver.
Overall sales increased to $10.66 billion from $9.95 billion a
year earlier, exceeding the $10.44 billion expected for the quarter
by analysts polled by FactSet.
During the quarter, Nike decided to pull a July Fourth shoe from
shelves after NFL-star-turned-activist Colin Kaepernick objected to
the design, which featured an early American Flag, a move that
stoked controversy inside and outside the sneaker giant, The Wall
Street Journal reported at the time.
For the full year, Nike expects revenue to grow in the high
single-digit range, Finance Chief Andrew Campion said on an
investor call.
"Nike is one of a few companies that can confidently point to an
acceleration in near-term [revenue] trends," Credit Suisse Group AG
analysts said in a note Tuesday, adding that they were encouraged
by Nike's guidance. Nike said Tuesday that it expects a full-year
gross-margin expansion of 0.5 to 0.75 percentage point, compared
with the previous guidance of 0.5 percentage point expansion.
The effect of U.S. tariffs on Chinese goods would be more
prominent in the current quarter, as President Trump's announcement
of the tariffs in August and their imposition in September didn't
give the company much time to manage any of the levers within its
overall portfolio, Mr. Campion said.
"We're a big proponent of free and fair trade, and that's
because tariffs have always been part of the financial equation at
Nike," Mr. Campion said. "So with a little bit of time, we have a
lot of levers we can work with from sourcing to other levers."
(END) Dow Jones Newswires
September 25, 2019 11:27 ET (15:27 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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