Sales at Nike "jumped 7%" in Q1, "boosted by large sales gains in China and showing the region's strength as a growth driver despite trade tensions with the U.S.," according to Chin & Safdar of the WALL STREET JOURNAL. Nike's Greater China revenue increased 22% to $1.68B. The company, which "doesn't own factories, produces about 25% of its global apparel and footwear in China." Meanwhile, revenue in Nike's North American market, which "accounts for the majority of total sales, rose roughly 4%" to $4.29B. Overall sales increased to $10.66B from $9.95B a year earlier, and "exceeded analysts' estimates" of $10.44B for the quarter that ended Aug. 31. Nike Chair, President & CEO Mark Parker said that the company's international and digital businesses "grew 16% and 42% respectively, and its women's business was helped by sporting events over the summer," such as the FIFA Women's World Cup. Nike’s profit was $1.37B, or 86 cents a share, up 25% from a year earlier (WALL STREET JOURNAL, 9/25). At presstime, shares of Nike were trading at $91.50, up/down 4.96% (THE DAILY).
OFF TO THE RACES: Parker in a release described Q1 as a "strong start" to the company's FY, which began on June 1. In Portland, Matthew Kish noted Nike expects sales in the FY to "climb in the high single-digits, slightly exceeding the company's performance last year." It also "expects gross margin to increase between 50 and 75 basis points." Nike has now "exceeded Wall Street sales expectations in 14 of the last 20 quarters and beat earnings expectations in 19 of the last 20 quarters" (BIZJOURNALS.com, 9/24). CNBC's Sara Eisen said investors have been "optimistic about Nike lately given it's on a hot innovation streak, strong sales and it's ability to weather global risks." She added, "They've been taking share from rivals Adidas and Under Armour." Pro4ma Founder & CEO Liz Dunn said there is an expectaion that Nike's "numbers get better from here" as they "head into an Olympic year" in '20 ("Closing Bell," CNBC, 9/24).
HEAR ME ROAR: Meanwhile, CNBC's Lauren Thomas noted Nike's women's business in Q1 "grew at a double-digit clip." The company has "vowed to do a better job at making gear for female shoppers, and it hopes efforts like working with" Serena Williams as an ambassador "will help" (CNBC.com, 9/24). Jane Hali & Associates Analyst Jessica Ramirez said what Nike has "done with the women's market is really to try to connect with that female that could be fashionable," such as what they did with the USWNT jerseys, which were "one of the top-selling across Nike they've ever seen" ("Worldwide Exchange," CNBC, 9/25).
