Nike Shares Jump as Earnings Beat Forecasts
Nike’s quarterly profits have beaten analysts’ forecasts due to US sales recovering and lower material costs helped offset continued weakness in China.
The world’s largest athletic shoe and clothing retailer posted a third-quarter net income of $662m, against a target of $569m for the last three months of 2012.
The news of their success saw Nike shares jump 8% in after-hours trading on Wall Street.
Nike’s revenue increased 9% to $6.2bn (£4bn), with the US accounting for $2.55bn which is up 18% on the previous quarter. Revenue from China was down 9% to $635m.
Nike said in a statement that future delivery orders from China for the next quarter are strong. Morningstar analyst Paul Swinand said: ‘For real long-term growth to be solid, it has to come from China and emerging markets.
Nike chief executive Mark Parker said the company was seeing progress in China, but ‘we still have more to do, before we can capture its long term growth potential’.
Revenue from Nike’s ecommerce store rose 33% in the quarter, Mr Parker said: ‘It’s a pretty big gap between where ecommerce is today and where we can take it’.
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