Nike tops estimates for first-quarter profit in part thanks to strong sales in China
Shares of Nike Inc. rose more than 5% in the extended session Tuesday after the apparel and footwear maker reported quarterly earnings and sales that topped Wall Street expectations and included a jump in China.
Nike NKE, +4.16% said it earned $1.4 billion in the fiscal first quarter, or 86 cents a share, compared with $1.1 billion, or 67 cents a share, in the year-ago period.
Revenue rose 7% to $10.7 billion, Nike said. Analysts polled by FactSet had expected GAAP earnings of 71 cents a share on sales of $10.4 billion.
Nike pinned the profit increase on “strong revenue growth and gross margin expansion,” it said in a statement.
Sales in China rose 27% excluding currency changes. The Greater China region also led Nike’s quarterly profit before interest and taxes in the quarter, up 33%.
In contrast, Nike’s North American sales rose 4% and the company’s adjusted profit for North America increased 2% in the quarter.
The sales uptick in China included a 29% rise in equipment sales and a 28% increase in apparel, excluding currency charges. The lion’s share of sales in China were in the footwear business, which rose to $1.2 billion, up 27% excluding currency charges.
In total, fiscal 2020 first-quarter Nike sales in China rose to $1.7 billion from $1.4 billion in the year-ago quarter.
Shares of Nike had ended the regular trading day down 0.6%. The stock is up nearly 18% this year, compared with gains of 18% and 15% for the S&P 500 index SPX, +0.62% and the Dow Jones Industrial Average. DJIA, +0.61%