Nike Inc. (NYSE:NKE), the world’s largest sporting-goods company, climbed in premarket trading after posting a stronger-than-expected 38 percent profit jump in its fiscal first quarter fueled by higher sales in North America.
Nike advanced 5.9 percent to $74.50 at 5:58 a.m. in New York, set for a new all-time high price. The stock has rallied 36 percent so far this year, compared with a 19 percent increase for the Standard & Poor's 500 index (INDEXSP:.INX). Nike this month was added to the 30-member Dow Jones Industrial Average Index (INDEXDJX:.DJI).
Net income in the three months ended Aug. 31 increased to $780 million, or 86 cents a share, from $567 million, or 63 cents a share, in the year-earlier period, the Beaverton, Oregon-based company said in a statement after markets closed yesterday.
The average estimate of 24 analysts polled by Reuters was for a profit of 78 cents a share.
Sales grew 7.7 percent to $6.97 billion, surpassing analysts' $9.96 billion expectation. Sales in North America, the sports-apparel maker's largest market, increased 9.4 percent to $3.14 billion. Sales rose in all regions except China, where sales fell 3 percent to $574 million.
Nike benefits from strong demand for athletic gear in the U.S. and Europe. Strength in the key basketball and running categories, as well as soccer and men's training, overpowered slight weakness in sportswear.
Futures orders for delivery between September and coming January, excluding currency impact, rose 10 percent.
Nike's gross margin added 1.2 points to 44.9 percent of sales, helped by lower cotton costs and fewer markdowns.
During the period, Nike said it bought back a total of 8.4 million shares for approximately $526 million as part of the four-year, $8 billion program. As of the end of the quarter, the company had repurchased a total of 23.7 million shares under the program at a total cost of about $1.3 billion.