GadCapital: Shares of Nike jumped 6% after the company reported a rise in profits and sales.


Nike’s stock soared to an all-time high late Thursday as the company’s quarterly profits beat Wall Street expectations. Nike makes sporting clothing.

Nike stock was added to the Dow Jones industrial average in recent weeks, which is a weighted benchmark index of 30 major American corporations. The heavy after-hours activity sent the shares up 6.2% to around $74.70 after the market closed.

Earnings of $780 million (86 cents per share) in the first quarter of the fiscal year, or 86 cents compared to $567 million (63 cents per share) in the same time last year. Lower raw material prices and less discounting helped balance increased labor expenses and a stronger currency, which ate into net profits.

Profits increased by 8% to $6.97 billion, up from $6.47 billion in the same period last year’s quarter. According to FactSet’s poll of analysts, earnings per share on sales of $6.96 billion were 78 cents.

Nike’s net income increased by 38% in the first quarter of its fiscal year due to higher sales in North America and Europe, as well as higher prices around the globe.

Nike has had to contend with a shifting European economy and a downturn in China’s economic development during the last year. Reworking its products in China to better reflect the changing preferences of Chinese customers has been a priority for this corporation. China’s revenue is expected to climb in the second quarter and remain flat for the rest of the year, according to a conference call with investors.

“We are making progress in repositioning this market for long-term, sustainable development,” CEO Mark Parker said.

Nike’s primary market, North America, has seen robust demand for its key brands, such as Nike and Converse, while it has dropped less lucrative businesses like Umbro. Only golf saw a decline in North American sales.

Running, basketball, soccer, and men’s training saw an increase in Nike sales of 7 percent to $6.5 billion. This increase somewhat offset the fall in sportswear. The income generated by Converse increased by 16% to $494 million.

Except for China, where sales declined 3% to $574 million, revenues climbed.

In Europe, things were looking up. European sales increased by 8% to $1.3 billion and 10% to $366 million in Central and Eastern Europe. To $3.14 billion, North America’s sales increased 9 percent.

Deliveries between September 2021 and January 2022 saw an increase of 8% in orders.

Nike shares gained $1.42, or 2.1 percent, during Thursday’s regular trading session to $70.34. The stock’s year-to-date range has been between $44.83 and $70.56.

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