Nike tops analysts’ estimates in Q4
NEW YORK: Nike Inc beat fourthquarter profit and revenue estimates as new launches and focus on direct-to-customer sales helped reverse declining sales in North America for the first time in a year.
The Dow component’s shares rose eight per cent to US$77.40 (RM312.56) on Thursday and were on track to hit a record yesterday after the company also announced a new US$15 billion buyback programme and said it expected fiscal 2019 revenue at the higher end of its earlier forecast.
The athletic shoe maker has struggled in North America, its biggest market, as it battles tough competition from a resurgent Adidas and Puma, as well as bankruptcies of sports retailers such as Sports Authority and Sports Chalet.
Nike has responded with an emphasis on new launches and selling directly to customers through its stores and online, while also partnering with Amazon.com Inc.
Sales in the North America rose 2.76 per cent, easily beating analysts’ estimate of a 0.98 per cent increase, according to Thomson Reuters I/B/E/S.
Nike said it expects next year’s revenue to be in the high singledigit range, compared with its earlier forecast of mid-to-high single-digit growth.
“I’m confident we’ll use this quarter as a catalyst for growth into fiscal 2019 and beyond,” said chief executive officer Mark Parker.
Fourth-quarter gross margin had expanded 60 basis points to 44.7 per cent. Net income rose to US$1.14 billion in the fourth quarter ended May 31, from US$1.01 billion a year earlier.
Total revenue rose 12.8 per cent to US$9.79 billion, also topping estimates of US$9.41 billion.
The company, which has set a US$50 billion revenue target for 2020, said fiscal 2018 sales rose six per cent to US$36.40 billion.