Shares of apparel and footwear producer Nike sprinted higher after it reported strong fiscal third quarter results, including double-digit growth in revenue and fatter gross margins.
Shares of Nike (NKE) were up $4.16, or 7.7%, to $57.82. Nike shares had declined more than 2% in regular trading.
The company reported a 16% increase in net income to $662 million, or 73 cents per share, on a 9% increase in revenue to $6.2 billion. Analysts were looking for quarterly earnings of 67 cents per share, according to Thomson Reuters.
Nike Brand revenues rose 10%, with growth in all geographies except China and Japan, and in all key categories except sportswear and action sports. Gross margin increased 30 basis points to 44.2%, boosted by price increases and lower costs for materials. That was offset by discounting in China, where Nike is reducing inventory. Exchange rates also had a negative impact on results.�Inventories were $3.3 billion, up 4% year over year.
The company’s cash position, at $4.0 billion, was $845 million higher than the same period a year ago, “mainly as a result of higher net income, proceeds from the sale of the Umbro and Cole Haan businesses and continued focus on working capital management;” more details in Nike’s earnings press release.
Nike said it repurchased 4.9 million shares in the third quarter for approximately $253 million as part of a four-year, $8 billion program.
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