Yahoo Finance Nike Sales Surge On Europe, Internet
Nike got a running start to its fiscal 2015 as the sportswear giant hurdled over forecasts with strong sales at home and abroad.
The company also sees per-share earnings increasing at a high teens rate in Q2 and 20% for the year. Analysts expect growth of 11.9% in Q2 and 14.1% for 2015.
In Q1, EPS jumped 26.7% to $1.09, topping analysts' estimates by 21 cents. Revenue rose 14.5% to $7.98 billion, beating views for $7.83 billion and marking the fastest growth in nearly three years.
Revenue rose 25% in western Europe, 12% in North America, and 20% in greater China, excluding currency changes.
Shares of the Beaverton, Ore.-based firm rose 7% late.
"Nike (NKE) is eating Adidas' lunch, especially in western Europe," Macquarie analyst Laurent Vasilescu told IBD, adding that in China, "This is the kind of growth that you could only wish for when you reset an existing market.
He attributed the Chinese gains to Nike's pullback on distribution in an effort to "premium-ize" the perception of the brand. The company had done the same thing in Europe about a year and a half ago to positive effect, Vasilescu noted.
Gross margin expanded 170 basis points to 46.6% on a shift to higher-margin products, higher average prices, and continued growth in the direct-to-consumer segment, which includes sales from its website and stores.
Nike said in a post-earnings conference call that e-commerce revenue jumped by more than 70%.
Worldwide futures orders for Nike Brand footwear and apparel scheduled for delivery from September 2014 through January 2015 rose 11% year over year, a 14% rise excluding currency changes, led by European and North American demand.
The company sees low-to-mid-teens revenue growth in China in 2015, heavily weighted toward the first half of the year.
The "athleisure" trend of wearing activewear outside the gym has also contributed to Nike's continued popularity.
The company has been in the news lately as several of its major endorsed athletes made the headlines, frequently in a bad way.
Nike suspended the endorsement contract of the Minnesota Vikings' Adrian Peterson following allegations of child abuse against the NFL running back, and terminated its deal with another running back, Ray Rice of the Baltimore Ravens, after revelations of domestic violence against his then-fiancee.
But it wasn't all bad news. Nike beat Under Armour (UA) for NBA superstar Kevin Durant, re-signing the Oklahoma City Thunder forward in a deal worth up to $300 million.
