Nike Inc. outperformed earnings and revenue estimates in the fourth quarter, as new launches and its focus on direct customer shipments helped reverse a decline in sales in North America for the first time in a year.
Nike shares climbed 8% to US $ 77.40 and are on track for a record opening on Friday, after the company announced a US $ 15 billion repurchase program and projected revenues for the 2019 fiscal year, superior of the range of your previous guide.
The sports shoe maker has struggled in North America, its biggest market, at times when it faces stiff competition from Adidas and Puma, as well as bankruptcy of sports retailers such as Sports Authority and Sports Chalet.
Nike has responded with an emphasis on new releases and direct sales to customers through its stores and on the Internet and has also partnered with Amazon.
Sales in North America rose 2.76%, far surpassing analysts’ estimate of an increase of 0.98%, according to Reuters.
Nike said it expects 2019 revenues to be in the upper single-digit range, compared to its previous forecast of medium-to-high one-digit growth.
Net income increased to US $ 1.14 billion, or 69 cents per share, during the fourth quarter which ended May 31, from US $ 1.01 billion, or 60 cents per share, in the same period of the previous year. When excluding extraordinary items, the company earned 69 cents per share, surpassing the estimates of 64 cents.
Total revenues increased 12.8% to US $ 9.790 billion, also exceeding estimates of US $ 9.41 billion.
The company, which set a revenue goal of US $ 50 billion by 2020, said sales for fiscal year 2018 rose 6% to US $ 36,400 million.