Nike (NKE) is starting the new fiscal year ready to wear by beating fiscal first-quarter financial projecitons.
For the quarter that ended Aug. 31, sales jumped 15% to $8 billion to yield per share earnings of $1.09, 21 cents ahead of Wall Street estimates. Meanwhile, the athletic shoe and clothing giant expects per share profit to climb 20% during the 2015 fiscal year.
Granted, sales of soccer gear and apparel benefitted enormously from the World Cup. But shoe and apparel sales are also rising among people who have no intention of getting sweaty. During a conference call regarding the results CEO Mark Parker highlighted the entrance of athletically-styled clothing into casual wear, and even workplace apparel. Apparently, the new look is called "athleisure.”
Investors were impressed. Nike shares surged urged 11.2% to $88.69.
Why so excited? Nike posted a host of shockingly strong numbers, with sale rising in every product type, geography and category except golf and actions sports.
In North America, Nike's biggest market, sales rose 15%. In Western and Eastern Europe, sales rose 25% and 9% respectively.
And future orders were a bright spot. Orders for the Nike brand for delivery from September through January rose 14%.
As Canaccord Genuity analyst Camilo Lyon writes:
In no uncertain terms, NKE is firing on all cylinders, especially in higher-margin categories and regions. DTC growth of 30% (comp +15% and e-commerce +70%) was also outstanding and indicates the success NKE is having with its category offense initiatives. As we anticipated, World Cup, running, and basketball sales were solid while women’s is also growing at a healthy DD pace, helped by both an improved premium assortment and increasing shelf space at key retailers like DKS. Global futures orders of 14% CC (+9% units and +5% ASPs) point to continued momentum particularly in key markets like NA (+15%) and WE (+20%). Overall, this was a fantastic quarter.
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