The Beaverton, Ore.-based firm said it would continue to buy back its own shares and put a new four-year, $5 billion program in place to purchase its Class B common stock. The new program takes over when the current $3 billion share repurchase program is wrapped up.
“Over the past 10 years, Nike has returned $5.5 billion to shareholders through the repurchase of more than 157 million shares,” said Mark Parker, president and CEO, in a Monday statement. “This new share repurchase program demonstrates our continued confidence in Nike’s long-term growth prospects and financial strength.”
As of the end of August, Nike had about 492.4 million Class B shares outstanding.
Analysts gave the buyback program the thumbs up, particularly given the recent tumult on Wall Street. “This could be a big catalyst for the stock in this environment,” Citi analyst Kate McShane said. “It demonstrates the strength of Nike’s balance sheet, the confidence it has in its business and should further improve the company’s already attractive [return on invested capital].”
Marie Driscoll, retail analyst at Standard & Poor’s Equity Research, saw the repurchase as “providing support to the shares in a volatile market.”
However, Driscoll lowered her first-quarter earnings estimate to 95 cents a share from 99 cents. Last year, first-quarter earnings weighed in at $1.12.
Nike will report results for the quarter after the market closes on Wednesday.
“We see stable margins, but expect the [foreign exchange] benefits Nike has enjoyed in the past two years will now provide a headwind,” she said.
Shares of Nike fell 67 cents, or 1.1 percent, Monday to close at $63.03.