Nike’s Stock Jumps With Sales, Profit Gains

Just did it.

Nike Inc.’s stock rose 8 percent to $124 in afterhours trading today after the company topped first-quarter sales and profit expectations and reported solid orders for the rest of the year.

President and chief executive officer Mark Parker talked up Nike’s strengths to analysts on a conference call, pointing to the company’s connections to consumers as well as athletes and its geographical and product diversity.

“While we’re not immune to the macroeconomic challenges that all businesses are facing, we are best positioned and best resourced to navigate the short-term and thrive in the long-term,” Parker said. “Nike is on a relentless pace and we have no intention of slowing down.”

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While Nike remains at the top of the heap in the athletic business with $30.6 billion in sales last year, the company is facing increased competition from the other brands looking to take share in the market, including still considerably smaller Under Armour Inc., which had sales of $3.08 billion last year, but is gaining traction.

Parker said Nike was using its portfolio of businesses to spread innovation, with new technological advancements from its namesake brand showing up in Hurly products, for instance.  In the performance apparel space, Parker said the company was using adaptive material to help regulate the wearer’s temperature.

The athletic company’s profits jumped 22.6 percent to $1.18 billion, or $1.34 a diluted share, from $962 million, or $1.09, a year earlier. Earnings per share came in 15 cents ahead of the $1.19 analysts projected on average.

Revenues for the three months ended Aug. 31, rose 5.4 percent to $8.41 billion from $7.98 billion — quicker sales growth than the 3 percent analysts had penciled in. Revenues gained 14 percent on a currency neutral basis. E-commerce sales grew by 46 percent in constant currencies with what Parker describe as “strong conversion” and increased mobile traffic.

On a brand level and excluding the impact of currency fluctuations, Nike revenues gained 15 percent to $7.9 billion while Converse revenues rose 3 percent to $555 million.

Orders for Nike branded footwear and apparel set to be delivered this month through January were 9 percent higher than a year ago, or 17 percent higher on a currency-neutral basis. Future orders for Greater China were up 22 percent.