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Investors and analysts applaud Nike's quarterly boost

By FashionUnited

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Fashion

ANALYSIS_ Nike reported Thursday a rise in quarterly profit, helped by strong sales of its apparel and footwear in North America and Western Europe. The World Cup in Brazil always played its part, boosting Nike sales and brand awareness further. Nike´s income from continuing operations

in the fourth quarter ended May 31 was up to 698 million dollars or 78 cents per share, ahead of the 690 million dollars, or 76 cents per share, it got a year earlier. Revenue from continuing operations rose 13 percent to 7.43 billion dollars - excluding the impact of currency fluctuations.


The sports apparel group also beat analysts' estimates, as market waited for earnings excluding items to come in at 75 cents a share on 7.34 billion dollars in revenue, according to a consensus estimate from Thomson Reuters.

”Another solid quarter” for Nike

"Another solid quarter," summed up Brian Yarbrough, analyst at Edward Jones. "They continue to just tear the cover off the ball. It's hard to find any flaws in any category. They are firing on all cylinders," added Yarbrough in a note.

"There is no shortage of growth opportunities for Nike," concurred CEO executive Mark Parker in a conference call with stock analysts. Nike's chief executive pointed to the combination of product innovation, partnerships with athletes and teams and an array of sporting events around the globe.

The world’s largest sporting-goods maker is benefiting from consumers increasingly buying athletic apparel and gear for everyday wear, not just when playing sports, highlighted data compiled by Bloomberg.

Likewise, Don Blair, Nike's chief financial officer, told analysts to expect revenue growth in the first quarter, which began June 1, at a low double-digit rate driven by World Cup sales. He is also betting on World Cup-related marketing spending, again fuelled by the World Cup, would likely be 30 percent higher than the same period last year.

The World Cup in Brazil also helped Nike's performance, as the group reported sales of 2.27 billion dollars in soccer in its fiscal year ending in May, up 18 percent from the last fiscal year.

North America has been the most boosted market, with the company seeing sales gained 10 percent to 3.29 billion dollars in the last three months, topping the 3.13 billion dollars average estimate from Consensus Metrix.

On the wake of the earnings announcement, Nike's stock rose more than 3 percent in extended-hours trading, rising to 79.40 dollars before the opening bell. That is to be compared with the company's all-time high trading price of 80.26 dollars.

"There is a lot to like about the Nike story," wrote Janney Capital Markets' Eric Tracy.

Angela González Rodríguez
Nike