NEW YORK, Dec 23 ― Nike Inc, the world's largest footwear maker, reported futures orders that breezed past analysts' estimates, powered by strong demand in North America and China.
The company's shares, already the top performing year-to-date Dow component, rose 2.5 per cent to US$135.23 (RM581), in extended trading yesterday.
The Nike brand orders for delivery from December through April, a gauge of demand the company calls “futures orders”, rose 20 per cent, excluding currency, as of November 30.
Analysts on average had expected futures orders growth of 13.6 per cent, according to Consensus Metrix.
Futures orders in Greater China ― a fast-growing market ― jumped 34 per cent, the biggest jump in two years. It rose 14 per cent in North America.
New footwear launches in the basketball, running and sports categories are helping Nike draw customers toward higher-priced products, while the “athleisure” trend is driving sales in the athletic apparel sector.
Nike's higher-margin Jordan, LeBron, Kobe and KD basketball shoe brands have been especially popular in the US, helping drive sales of the company's footwear division.
The company's running shoe brands, which include Lunar, Free, Flyknit, Roshe Run, Huarache and Max Air, have also seen rising demand.
“Nike has the space to themselves right now, competition is virtually non-existent for the company,” Edward Jones analyst Brian Yarbrough said, adding that the company's focus on product innovation, the health and wellness segment are boosting demand.
Revenue from North America, Nike's largest market, rose 9.4 per cent in the second quarter ended November 30. Footwear sales in the region rose 12.3 per cent to US$2.16 billion.
Sales in Greater China rose 24 per cent, helped by overhauled stores and greater online traffic.
Nike said net income jumped 20 per cent to US$785 million, or 90 cents per share.
The company said net income also benefited from a lower effective tax rate.
Revenue rose 4.1 per cent to US$7.69 billion.
Analysts on average had expected earnings of 86 cents per share and revenue of US$7.81 billion, according to Thomson Reuters I/B/E/S. ― Reuters
