Nike Inc. posted second-quarter results that showed the footwear and athletic-apparel giant remains largely immune to the shopper malaise that’s plagued much of retail.
The world’s largest sporting-goods maker posted profit of 90 cents a share, topping analysts’ average estimate of 86 cents, as it continued to reap the rewards of a dominant brand and the ongoing fashion shift toward casual, sporty attire. It also defied concerns about slowing economic growth in China, with revenue there gaining 24 percent to $938 million.
- Orders for the Nike brand for the next four months rose 20 percent, excluding the effects of currency. Analysts expected a 13.6 percent gain.
- Net income increased 20 percent to $785 million.
- Sales rose 4.1 percent to $7.69 billion. Analysts estimated $7.81 billion.
- Gross margin widened 0.5 percentage point to 45.6 percent.
The shares rose as much as 4.1 percent to $137.31 in late trading in New York. Nike had gained 37 percent this year through the close on Tuesday.
“Overseas markets have great potential,” for Nike, said Paul Swinand, an analyst at Morningstar Inc. “Investors should take a read on Chinese consumers from the futures orders: There’s room to purchase new Western goods in people’s budgets. That highlights the potential for the long-term middle-class growth there.“
$50 Billion
The earnings report is Nike’s first since it announced a goal of increasing annual sales to $50 billion by fiscal 2020, up from $30.6 billion in its most recent fiscal year. The target implies an annual growth rate of 10.3 percent, slightly higher than the past two years. The company expects about a third of those gains to come from its online business. That trend played out last quarter, with sales through its websites surging 49 percent.