The popular athletic-wear maker, Nike shares rose after the firm announced that revenue for the current fiscal year will reach $50 billion for the first time, due to recovering growth in North America.
Before US markets opened, shares of the Beaverton, Oregon-based apparel and footwear firm surged as much as 13 percent to $151 billion, a new high. Through the close in New York, the stock had lost 5.6 percent this year. In Germany, rival Adidas gained as much as 5.8 percent. The growth is evidence that the company has recovered from the pandemic.
Many analysts raised their price forecasts for the stock, citing the company’s excellent long-term goals.
“We are building a new financial model that will continue to fuel long-term sustainable, profitable growth,” Nike CFO Mr. Matt Friend said in the statement.
As per reports, CEO Mr. John Donahoe is trying to drastically reduce wholesale distribution by eliminating many of the company’s retail partners in favor of more lucrative direct-to-consumer sales. As a result, sales for the Nike Direct division increased by 73 percent in the most recent quarter.
Nike had previously struggled in North America due to supply-chain difficulties that prevented products from reaching customers. As the US eased COVID-19 related restrictions and several athletic events resumed in full, some of those delayed shipments were pushed into this quarter, boosting wholesale income.
Meanwhile, Nike’s sales growth in China, which had been driving the company’s recovery until lately, is slowing. Revenue climbed just 17 percent and less when excluding currency swings to $1.93 billion, missing analyst’s expectations of $2.25 billion. The findings could represent the impact of the boycott of Nike and other brands in response to corporate statements about forced labor in cotton production in the United States.
However, store closures continued throughout Europe, the Middle East, and Africa. But Nike has been able to reopen almost its entire network, with nearly all of its stores in the region now fully operating with shortened hours.