Nike Inc. shares have descended into the red in after-hours trading despite the firm’s double-digit profit growth in the first quarter, reported after the market close today.
As of 4:30 p.m. ET, the stock remained down nearly 2 percent to $83.28.
It has been a tumultuous few weeks for Nike — which saw investor sentiment dip briefly but eventually rise to an all-time high after the unveiling of an ad campaign featuring controversial ex-footballer Colin Kaepernick. (The former NFL quarterback gained notoriety for kneeling during the National Anthem at football games to protest racial discrimination.)
The company said today that its Q1 profits rose 15 percent to $1.1 billion, or 67 cents per share, topping analysts’ forecasts for profits of 63 cents per share. Meanwhile, revenues advanced 10 percent to $9.9 billion, roughly in line with market watchers’ bets.
Nike chairman, president and CEO Mark Parker touted the firm’s “Consumer Direct Offense” strategy. Unveiled in 2017, the plan focuses on accelerated innovation, speed and direct sales — as well as growth across “all geographies” for double-digit top- and bottom-line gains during the period.
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“Nike’s ‘Consumer Direct Offense,’ combined with our deep lineup of innovation, is driving strong momentum and balanced growth across our entire business,” Parker said in a release. “Our expanded digital capabilities are accelerating our complete portfolio and creating value across all dimensions as we connect with and serve consumers.”
By division, sales for the flagship Nike brand rose 10 percent to $9.4 billion, driven by double-digit growth internationally and in Nike Direct, as well “strong momentum” in North America, where the firm had struggled recently but managed to return to growth in Q4. The company said it saw growth in “almost every category” led by Sportswear.
Things were also looking up at Converse, where growth had recently proved elusive, with the brand posting a 7 percent gain in revenues to $527 million. Those results were driven mainly by growth in Europe and Asia, Nike said.
“We are delivering stronger global growth and profitability than we anticipated entering this fiscal year,” said EVP and CFO Andy Campion. “While foreign-exchange volatility has increased, our underlying currency-neutral momentum continues to build as we transform how Nike operates, drives growth and creates value for our shareholders.”