Nike: quarterly profit tops estimates, shares up
(CercleFinance.com) - Nike's quarterly profit easily beat Wall Street's expectations, as margins increased, sending the US sports gear maker's shares up almost 6% on Wednesday.
For the first quarter ended 31 August, the company earned 1.4 billion dollars, or 86 cents a share, compared with 1.1 billion dollars, or 67 cents a share last year.
With revenue up 7% to 10.7 billion dollars, Nike also posted a 1.5-basis point increase in its gross margin to 45.7%, primarily driven by higher selling prices, despite negative FX factors and higher costs.
Analysts at Susquehanna said the group's momentum remains "exceptionally strong," despite macroeconomic headwinds (FX, tariffs, geopolitical tensions).
The brokerage firm believes that compelling initiatives and strategic investments - particularly in digital - should lead to sustainable margin expansion.
Seeing "continued upside," Wedbush Securities reiterated its "outperform" rating on the stock, and raised its price target from 96 dollars to 100 dollars.
Credit Suisse also raised its target price from 97 dollars to 105 dollars.
Shares of the Beaverton, Oregon-based company's were up 5.6% at 92 dollars in trading on Wednesday morning, after yesterday's close at 87.2 dollars on the New York Stock Exchange.
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