Nike Inc., the world’s largest maker of athletic shoes, rose to the highest since the company went public in 1980 after profit beat some analysts’ estimates and orders in North America and China surged.
Net income rose to $559 million, or $1.14 a share, in the period that ended Aug. 31, from $513 million, or $1.04, a year earlier, the Beaverton, Oregon-based company said yesterday in a statement after U.S. markets closed. Analysts estimated profit of $1, the average of 16 estimates.
Nike’s per-share profit excluding one-time items has beaten the average analyst estimate for 17 straight quarters, according to Bloomberg data. Global orders for Nike brand shoes and clothes for delivery between September and January grew 13 percent, excluding currency effects. Analysts expected 9.7 percent, the average of seven estimates in a Bloomberg News survey.
“We’re looking at a continued healthy recovery,” Chief Executive Officer Mark Parker said yesterday in a conference call with analysts. “I still contend a slow, steady state of recovery. I don’t see dramatic shifts in that course at this stage.”
Nike climbed $3.20, or 4.1 percent, to $80.87 at 11:08 a.m. in New York Stock Exchange composite trading. The shares earlier rallied to $81.70, the highest since its initial public offering in December 1980, and climbed 18 percent this year before today.
Paying a Premium
“People are paying for really high quality names and paying a premium and they are paying a premium for this, that’s for sure,” said Chris Svezia, an analyst for Susquehanna Financial Group in New York, who has a neutral rating on Nike shares. “The stock is pricey still, but they are certainly executing. I’ll hand it to them, they did a nice job.”
Revenue from the Nike brand in North America, the company’s largest market, increased 8 percent to $1.9 billion as apparel sales rose 16 percent to $515 million. Orders grew 14 percent, excluding currency changes, the third-straight gain.
Sales of the Nike brand in China rose 11 percent to $460 million, driven by revenue from basketball shoes, the company said. Orders, excluding the effects of currency changes, in the world’s most-populous country surged 23 percent.
“As consumers are getting wealthier here they are buying special items for the gym, for the weekend, for going out,” Shaun Rein, managing director of China Market Research Group in Shanghai, said in a phone interview today. “Nike are doing the best because they have the best brand loyalty.”
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