Nike shares rose 4.2% Wednesday, closing at $90.91. The stock hit a high of $92.79 during the session.
On Tuesday, the Beaverton, Ore., company said sales rose 7% in the latest quarter from a year earlier, with Greater China revenue climbing 22% to $1.68 billion despite trade tensions with the U.S. The boost trailed that of the company’s fourth-quarter results in June, showing the China region’s strength as a growth driver.
Overall sales increased to $10.66 billion from $9.95 billion a year earlier, exceeding the $10.44 billion expected for the quarter by analysts polled by FactSet.
During the quarter, Nike decided to pull a July Fourth shoe from shelves after NFL-star-turned-activist Colin Kaepernick objected to the design, which featured an early American flag, a move that stoked controversy inside and outside the sneaker giant, The Wall Street Journal reported at the time.
For the full year, Nike expects revenue to grow in the high single-digit range, Finance Chief Andrew Campion said on an investor call.
“Nike is one of a few companies that can confidently point to an acceleration in near-term [revenue] trends,” Credit Suisse Group AG analysts said in a note Tuesday, adding that they were encouraged by Nike’s guidance. Nike said Tuesday that it expects a full-year gross-margin expansion of 0.5 to 0.75 percentage point, compared with the previous guidance of 0.5 percentage-point expansion.
The effect of U.S. tariffs on Chinese goods would be more prominent in the current quarter, as President Trump’s announcement of the tariffs in August and their imposition in September didn’t give the company much time to manage any of the levers within its overall portfolio, Mr. Campion said.
“We’re a big proponent of free and fair trade, and that’s because tariffs have always been part of the financial equation at Nike,” Mr. Campion said. “So with a little bit of time, we have a lot of levers we can work with from sourcing to other levers.”
Copyright ©2019 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8