Shares in NIKE Inc (NYSE:NKE) jumped higher overnight after the world’s largest sports brand beat analyst forecasts with its third-quarter earnings and signalled a turnaround in its core North American market.
In pre-market trading on Friday, the stock rose 4.9% to US$67.60, just shy of its all-time high reached earlier this year.
International sales strong once again
Excluding a one-time charge related to the new US tax changes, the Oregon-based group reported adjusted earnings of US$0.68 per share on revenues of US$8.98bn in the quarter ended February 28.
Wall Street analysts had forecast earnings of US$0.53 a share on sales of US$8.85bn, according to a Thomson Reuters survey.
NIKE’s outperformance was fuelled once again by strong international growth and momentum in China, where sales jumped by almost 25%.
That helped to offset another quarter of sales declines in North America, where revenues were down 6%. Nike has been struggling in its home market – which is also its largest in terms of sales – as shoppers become flooded with options from rival such as Under Armour Inc (NYSE:UAA) and Adidas.
US to return to growth in fiscal 2019
But chairman and chief executive Mark Parker used the earnings report to hint at a turnaround in the US and Canada.
“NIKE’s Consumer Direct Offense drove strong double-digit growth across our international geographies, led by Greater China,” said Parker.
“As we close Q3, we now see a significant reversal of trend in North America, as momentum accelerates through the scaling of new innovation platforms and differentiated NIKE Consumer Experiences expand across the marketplace.”
Chief financial officer Andy Campion said in a call with analysts that US sales should turn positive and grow again by the first half of fiscal 2019.
Board shake-up
Nike’s earnings were released just days after two top executives stepped down over alleged “workplace behavior” complaints.
According to the Wall Street Journal, Trevor Edwards, president of Nike Brand, and Jayme Martin, a vice president and general manager of global categories, have both been accused of protecting male employees who demeaned women and bullied individuals from foreign countries.