FILE PHOTO: Nike shoes are seen on display in New York, U.S., March 18, 2019. REUTERS/Shannon Stapleton/File Photo GLOBAL BUSINESS WEEK AHEAD
(Reuters) – Nike Inc’s (NKE.N) first-quarter revenue and profit beat Wall Street estimates on Tuesday as the sportswear maker’s strategy to sell sneakers and apparel directly to consumers through its own stores and online retailers powered growth.
Shares of the Oregon-based company rose more than 5% to $91.84 in extended trading, putting them on course to open at a record high on Wednesday.
Wall Street has been bullish about Nike after the world’s largest footwear maker unveiled “Nike Direct,” a push to sell more of its products directly to customers through online platforms such as Amazon.com Inc (AMZN.O), rather than wholesalers.
Nike has also launched pop-up stores that caters to “sneakerheads” or loyal fans of the brand in several big U.S. cities in an effort to build a strong relationship with its customers and gain market share.
The move helped the company sell more products at full prices, which boosted gross margins to 45.7% in the first quarter ended Aug. 31, higher than the 44.41% anticipated by analysts.
Revenue in North America, its biggest market, rose 3.6%, while sales in Greater China, its fastest growing market, jumped 22%.
Net income rose to $1.37 billion, or 86 cents per share, from $1.09 billion, or 67 cents per share, a year earlier. Revenue rose 7.2% to $10.66 billion.
Analysts were expecting the company to earn 70 cents per share and revenue of $10.44 billion, according to IBES data from Refinitiv.
Reporting by Nivedita Balu in Bengaluru; Editing by Arun Koyyur