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Investing.com — Nike ‘s European rivals gained on Wednesday after the U.S. athletic apparel giant posted better-than-expected quarterly revenue in all regions apart from China.
German peers Puma (ETR:PUMG) and Adidas (ETR:ADSGN) jumped towards the top of the pan-European STOXX 600 in early morning dealmaking, along with British sporting goods retailer JD Sports Fashion (LON:JD).
Meanwhile, shares in Nike (NYSE:NKE) surged by more than 13% in extended hours trading, putting the stock on track for its biggest daily gain since June 2021. The shares remain down by over 34% in the last one-year period, however.
The Oregon-based company posted a 17% increase in global sales to $13.3 billion in its fiscal second quarter, ahead of Bloomberg-compiled estimates of $12.6B. Diluted earnings per share of $0.85 were above forecasts of $0.65, while net income was flat compared to the prior year at $1.3B.
Solid demand in North America in the three months to the end of November helped offset a 3% decline in sales in a Chinese market hit by COVID-19 restrictions. Price increases also partially outweighed an inflation-linked rise in freight costs and product input expenses.
“Our growth was broad-based and was driven by our expanding digital leadership and brand strength. These results give us confidence in delivering the year as our competitive advantages continue to fuel our momentum,” said Nike president and chief executive officer John Donahoe in a statement.
Analysts at Wells Fargo said the results underscored the strength of the Nike brand in the face of a volatile macroeconomic environment. They added that the firm known for its iconic “swoosh” logo has made progress in drawing down its inventories, which still grew by 43% year-on-year.
The Wells Fargo analysts, along with peers at several other investment banks, subsequently raised their price target for Nike shares.
Apart from Europe, the knock-on effects from Nike’s announcement were seen in pre-market gains made by U.S. athletic-wear groups like Under Armour (NYSE:UAA), Lululemon Athletica (NASDAQ:LULU), and Foot Locker (NYSE:FL). Asian suppliers to Nike, including Taiwan’s Feng Tay Enterprises (TW:9910) and Hong Kong’s Shenzhou International Group Holdings (HK:2313), also rallied.
