Nike silences naysayers after outstanding quarter
Shares of the world's largest athletic apparel maker surge after its profit beats analyst expectations.
Profit from continuing operations at the company soared 16% to $662 million, or 73 cents a share, from $569 million, or 61 cents a share, a year earlier. Revenue rose 10% to $6.2 billion in the quarter ended Feb. 28. Wall Street analysts expected profit of 67 cents a share on revenue of $6.23 billion. The company also gave an earnings forecast for 2014 that was in line with analysts' estimates. Click here for a closer look at the numbers.
Investors were particularly impressed that gross margins gained 30 basis points to 44.2% as Nike raised prices to counter rising costs and also reduced an inventory glut that has hurt business in China. The world's most populous country continues to be a concern. Though sales there declined by 9%, orders posted a 3% gain, far better than the decline analysts expected.
Nike, whose shares had been a laggard as the stock market hit record highs, may see more momentum if it continues to show improvements in its gross margins and in its China business. CEO Mark Parker also told Wall Street analysts on the earnings conference call that he was not satisfied with the company's e-commerce efforts.
"I can assure you, given the size of the opportunity, everyone on the leadership team shares
my sense of urgency around e-commerce," he said.
Wall Street believes that Nike's stock price may have outrun its fundamentals. Analysts have an average 52-week price target on the stock of $57.34, above where it traded earlier this week. If it continues to do well, Nike's success would prove to skeptics that the economic recovery is for real.
Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
[BRIEFING.COM] S&P futures vs fair value: -12.90. Nasdaq futures vs fair value: -30.80. The stock market is on track to begin the session on a lower note as futures on the S&P 500 trade 13 points below fair value. Index futures have spent the entire overnight session in the red amid disappointing quarterly results from a handful of major global companies.
In South Korea, Samsung tumbled nearly 4.0% after reporting results in line with its warning from the beginning of the ... More
More Market News
3 stocks will be in the spotlight Thursday as investors try to make sense of the numbers from the sector.
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'