Nike stock gains after company’s sales jump in China

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Shares of Nike Inc. rose more than 5% in extended session Tuesday after the apparel and footwear maker reported quarterly earnings and sales that beat Wall Street expectations and included a jump in China .

Nike NKE,
+2.60%
said it earned $1.4 billion in the fiscal first quarter, or 86 cents per share, compared with $1.1 billion, or 67 cents per share, a year ago.

Revenue rose 7% to $10.7 billion, Nike said. Analysts polled by FactSet had expected GAAP earnings of 71 cents per share on sales of $10.4 billion.

Read more: When LeBron James chose Nike in 2003, he gave up $28 million – it could end up earning him $1 billion

Nike pinned the profit increase on “strong revenue growth and gross margin expansion,” it said in a statement.

Sales in China increased by 27% excluding currency effects. The Greater China region also led Nike’s quarterly earnings before interest and taxes in the quarter, up 33%.

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In contrast, Nike’s North American sales increased 4% and the company’s North American adjusted earnings increased 2% in the quarter.

The sales increase in China includes a 29% increase in equipment sales and a 28% increase in apparel sales, excluding currency. The lion’s share of sales in China was in the footwear sector, which reached $1.2 billion, up 27% excluding foreign exchange costs.

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In total, Nike’s sales in the first quarter of fiscal year 2020 in China reached $1.7 billion, compared to $1.4 billion in the year-ago quarter.

Shares of Nike had ended the regular trading day down 0.6%. The stock is up nearly 18% this year, compared to gains of 18% and 15% for the S&P 500 SPX index,
+1.27%
and the Dow Jones Industrial Average. DJIA,
+1.20%

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