The biggest sports goods manufacturer in the world – Nike Inc. reported that profit in the three months ended August 31st exceeded analysts projections as sales received a boost by the FIFA World Cup tournament.
The companys President and Chief Executive Officer Mr. Mark Parker said in a statement: “Fiscal year 2015 is off to a strong start. Our connection to consumers and ability to innovate, combined with our powerful global portfolio, is a complete offense. Nike has never been better positioned to realize our tremendous growth potential.”
According to Nikes statement, its net income over the first fiscal quarter increased by 23% and reached $962 million, or $1.09 per share, beating analysts forecasts for 88 cents per share. In comparison, the company posted a net income of $779 million, or 86 cents a share, in the same period a year ago. Nike also shared that revenue in the three months through August 31st surged 15% to $8 billion.
“The results across the board are extremely impressive,” Brian Yarbrough, an analyst with Edward Jones & Co. in St. Louis, said in an interview for Bloomberg. “While the World Cup helped, it’s more than that. The product is resonating with consumers. They are dominating and keep taking market share.”
Nike shared that the orders for delivery from September through January increased by 14%, excluding the currency exchange-rate fluctuations. This result also beat analysts expectations of a 10% increase. Order for sporting apparel in the companys biggest market – North America, rose by 15%, surpassing analysts estimates of a 9.8% increase.
Although North America accounts for most of Nikes income, Europe was the biggest growth driver. Sales in Western Europe rose by 32% to $1.7 billion, the highest growth rate of all regions, challenging Adidas on home turf. The German companys sales in Western Europe rose by an annualized 6% to $2.6 billion in the six months ended June 30th, and Adidas has admitted that it faces increasing competition from Nike in the region.
Nike Inc. closed 1.35% lower on Thursday in New York at $79.75 per share prior to the release of the report, but rebounded more than 5% in after-hours trading. Shares surged 5.76% to 66.425 euros in Frankfurt by 8:39 GMT on Friday.
The company is valued at $69.25 billion based on Thursdays close. According to CNN Money, the 24 analysts offering 12-month price forecasts for Nike Inc. have a median target of $88.50, with a high estimate of 4100.00 and a low estimate of 475.00. The median estimate represents a +10.97% increase from the last price of $79.75.
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