Business

Nike shares fly as sales momentum mounts

A pair of Air Jordan 1 Retro shoes are seen before being packed to ship out of Stock X on January 10, 2018 in Detroit, Michigan. Image copyright Getty Images
Image caption Nike's Air Jordan 1 Retro trainers

Nike is back in fashion in North America with a 3% rise in sales in the most recent quarter, propelling shares to a record high on Friday.

It was the first quarterly year-on-year increase for the US sportswear company in the vital North American division in more than a year.

Nike also said that sales growth this year would be better than previously expected.

"We have momentum," chief executive Mark Parker said.

Nike said total revenues rose 13% to $9.8bn, also better than analysts had forecast.

While North America is the most important region for the firm and accounts for about 40% of revenues, international business is fuelling growth.

In the most recent quarter, the biggest rise in sales was in Greater China, where revenue soared 25% year-on-year.

'Officially back'

Image copyright Getty Images
Image caption Nike chief Mark Parker says the company has momentum

Nike has benefited from increasingly intense trainer fans and trends that favour retro styles, such as its classic high-top Jordans.

Its sleek Flyknit shoes, distinguished by their digitally knit cloth fabric, have also gained traction.

The company, which now sells through online sites such as Amazon and Tmall, also said its efforts to boost online sales are paying off.

Digital revenue grew by 41% in the most recent quarter.

The results after the bell on Thursday sent shares soaring about 10% in after-hours trade. They were almost 12% higher at $80.13 in morning trading in New York on Friday.

"The Nike story is officially back at this point," said Barclays analyst Matthew McClintock.

Profits in the quarter rose 13% to $1.1bn helped by recent changes to the US tax code that cut its tax rate by more than half to 6.4%.

The once ubiquitous Converse, however, has fallen out of fashion, with sales sinking 8% in the most recent quarter.

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