Skip to main content
BoF Logo

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.

Nike Shares Rise After Strong Quarterly Results

Shares rose 8 percent on Friday, after solid quarterly results eased concerns about escalating Sino-American trade tensions.
Nike Cortez sneakers | Source: Courtesy
By
  • Reuters

BEAVERTON, United States — Nike shares rose 8 percent on Friday, after the company's solid quarterly results eased worries that escalating trade tensions between Washington and Beijing would weigh on China demand and hurt the sportswear maker's growth story.

The company's double-digit percentage growth in China was in addition to strong demand in North America, Nike's biggest and most competitive market, where sales got a boost from higher full-priced sales and a rebound in Jordan sneakers.

In a note titled "A perfect quarter in an imperfect world," Jefferies analyst said that Nike's results this quarter were perfect amidst global trade disruption cited by FedEx.

Earlier this week, FedEx stunned markets with a drastic cut in its full-year profit forecast, citing global trade worries.

ADVERTISEMENT

On a post earnings call with analysts on Thursday, Nike's chief financial officer Andy Campion said that the company had not seen any impact from the ongoing trade friction.

"Clear indications of better sales in the US and elsewhere, including China, should help to comfort investors increasingly worried about the potential for macro slowdown," Oppenheimer analyst Brian Nagel said.

Nike has focused on new launches as well as on a direct-to-customer model of own stores and online sales to temper the hit from bankruptcies of sports retailers and competition from the likes of Adidas and Under Armour in the United States.

Its efforts have borne fruit. The company engineered a rebound in its North America market, clawing back market share from global rivals.

"Nike is boxing out its competition... the results illuminate the progress that Nike has made, and the guidance, which appears conservative, highlights the opportunities ahead," Susquehanna analyst Sam Poser wrote in a note.

For 2019, Nike forecast revenue to rise in the high single-digit percentage range and potentially touching double-digit growth.

At least two brokerages upgraded the stock to their highest rating following the company's better-than-expected results.

Overall, Wall Street's sentiment on the stock is bullish, with 24 of the 37 analysts covering the stock rating it "buy." The median price target on the stock is $87, while Nike's shares were trading at $73.20 in early trading.

ADVERTISEMENT

"In the end, China sales concerns have been diminished and Nike is executing solid strategies which should continue to drive increasingly profitable global market share gains," Wedbush Securities analyst Christopher Svezia said.

By Aishwarya Venugopal; editor: Sweta Singh.

In This Article

© 2024 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions

More from Financial Markets
A financial lens on the fast-changing fashion sector, including markets, investors and deals.

The Best of BoF 2023: Diversity’s Litmus Test

In 2020, like many companies, the $50 billion yoga apparel brand created a new department to improve internal diversity and inclusion, and to create a more equitable playing field for minorities. In interviews with BoF, 14 current and former employees said things only got worse.


The Year Ahead: The Future of Fashion Deal-Making

For fashion’s private market investors, deal-making may provide less-than-ideal returns and raise questions about the long-term value creation opportunities across parts of the fashion industry, reports The State of Fashion 2024.


The Investment Giant Behind Some of Fashion’s Biggest Deals

L Catterton, the private-equity firm with close ties to LVMH and Bernard Arnault that’s preparing to take Birkenstock public, has become an investment giant in the consumer-goods space, with stakes in companies selling everything from fashion to pet food to tacos.


view more

Subscribe to the BoF Daily Digest

The essential daily round-up of fashion news, analysis, and breaking news alerts.

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.
CONNECT WITH US ON
BoF Professional - How to Turn Data Into Meaningful Customer Connections
© 2024 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions, Privacy Policy, Cookie Policy and Accessibility Statement.
BoF Professional - How to Turn Data Into Meaningful Customer Connections