Nike Inc. surprised investors with an early Christmas gift this year.
The present came in the form of a $12 billion share repurchase program, a 14 percent increase in quarterly dividend and a two-for-one stock split, all announced after the market closed Thursday.
Since the news, the athletic-footwear-and-apparel giant’s stock has been gaining — up about 5 percent at press time.
“In a growing sports industry, Nike is the clear leader,” said Nike president and CEO Mark Parker, in a release. “We are built for growth, while also staying committed to creating shareholder value over the long term. We’ve proven it time and again, having returned over $23 billion to shareholders over the last 14 years through share repurchases and dividends. Moving forward, we see even greater potential for Nike as we continue to unlock new markets, new experiences and new products.”
The company said it anticipates that its current $8 billion share repurchase program will be completed before the end of fiscal 2016, at which point the new repurchase program will begin.
Nike’s board of directors also declared the quarterly cash dividend on the company’s outstanding class A and class B shares of 32 cents per share, on a pre-split basis, payable on Jan. 4, 2016 — representing a 14 percent increase over the previous pre-split quarterly rate.
Regarding the latest stock split, Nike said its board of directors declared the two-for-one stock split of both class A and class B shares and that the split will be in the form of a 100 percent stock dividend payable on Dec. 23, 2015.
“This move signals the confidence that Nike has in its current and long-term business,” wrote Sterne Agee CRT Sam Poser. “Nike continues to focus on achieving high [return on equity] and shareholder returns.”
The company expects its common stock to begin trading at the split-adjusted price on Dec. 24, 2015.
The cash dividend and stock split apply to shareholders of record at the close of business on Dec. 9, 2015.
Nike’s share price soared to a 52-week high back in October, shortly after Parker unveiled a five-year revenue target of $50 billion for the firm.