Nike spikes to record high after beating every single Wall Street profit forecast

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Reuters / Shannon Stapleton

  • Nike shares climbed to a record high Wednesday after reporting an earnings beat on Tuesday evening.
  • The stock surged as much as 6.4% in early trading on the news.
  • The earnings beat comes after two disappointing quarters for Nike and suggests the company’s transformation efforts are paying off.
  • Watch Nike trade live on Markets Insider.

Nike hit a record high on Wednesday after reporting strong earnings that exceeded even the most optimistic Wall Street estimate.

The shoe giant’s stock climbed more than 6% in early trading, hitting $92.79, handily beating the previous intraday high of $90 set on April 18.

In its earnings release on Tuesday, Nike reported earnings per share that exceeded even the most bullish analyst estimates by 13 cents, according to Bloomberg data.

Here are the key numbers from the report:

  • Revenue: $10.66 billion, compared to $10.44 billion estimated by analysts (highest estimate $10.62 billion)
  • Earnings per share: $0.86, compared to $0.70 predicted by analysts (highest estimate $0.73)

Growth was boosted by strong sales, especially a 27% increase in sales in Greater China that showed that Nike’s transformation efforts are working – the company can still perform and grow globally, even amidst rising uncertainty.

“Even amidst the increasingly volatile macroeconomic and geopolitical environment, we expect our unrelenting focus on better serving the consumer to continue fueling strong, broad-based growth across our global portfolio,” Andy Campion, Nike’s executive vice president and chief financial officer, said in a press release.

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The company’s focus on sportswear, sneakers, and e-commerce is also paying off. Sales for Nike women were up double-digits, as were sales of its famous Jordan sneakers. On a call with analysts, CEO Mark Parker said that digital sales grew 42% during the quarter.

In addition, the company saw improvement in its gross margins, which grew to 45.7% in the quarter. This prompted the company to boost its forecast for the rest of the year, even as headwinds such as the threat of tariffs from the trade war mount. It now expects gross margin expansion to be between 50 basis points and 75 basis points, up from its previous expectations of a 50 basis point expansion.

The earnings win comes after a particularly rough fourth quarter for Nike, when it missed consensus earnings estimates for the first time in 27 quarters. Analysts were still optimistic on the company even after Nike’s third quarter results also disappointed.

Shares of Nike are up roughly 24% year to date.

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Markets Insider