Shares of Nike climbed 8 percent on Friday, as the company reported that product innovation and robust online sales are helping gain higher revenue in North America as well as in international markets. The company’s stock is up 16 percent this year, representing the ninth positive year in 10-year time period, CNBC news reported. Furthermore, at midday, Nike’s climb added around 38 points to Dow Jones International Average.
Although Nike’s stock jumped on Friday, its year-to-date performance failed to keep up with its competitors in North America including Lululemon and Under Armour. Nike is pulling out in front which is expected to continue into the next year, CNBC reported, citing Stacey Widlitz, President of SW Retail Advisors, in its show called ‘Squawk on the Street’.
On Thursday, the sports apparel and footwear giant reported stronger-than-expected results of its second-quarter this year. Nike earned 52 cents per share, beyond the estimates of 46 cents per share by Refinitiv. In addition, the company topped the Wall expectations of $9.28 billion, jumping to $9.37 billion in sales.
Nike also expanded the forecast of its current fiscal year, expecting to witness a revenue growth between high-single digits and low-double digits. Widlitz said the company is regaining shares of market it lost to long-term rival Adidas. During the holiday season, the competitors’ shoes had markdowns but not Nike’s, she added.
In a note, Randal Konik, an analyst at Jefferies Group wrote that Nike had the perfect quarter amid the ongoing trade tensions between United States and China. While Nike’s sales grew 9 percent in North America, revenue in the international market surged by 20 percent. Further, the company witnessed a growth of 31 percent in its sales in China, even with global economic slowdown and trade tensions, excluding the fluctuations in currency.
As reported in CNBC news, the online sales also grew 41 percent as the company’s investment in digital integration continues to pay off. Nike is expected to continue to regain the share it lost to Adidas, Konik said in the note. However, Foot Locker is seen as a better way to play Nike’s resurgence.
On Friday, Foot Locker shares climbed 5 percent, while 70 percent of its products are contributed by Nike’s footwear.