(FinancialPress) — Nike‘s stock jumped the ranks by as much as 11% after the company‘s financial results for the last quarter were posted. The 3-month period outcome outdid the shoemaker‘s own expectations.
Both sales and profits rose year-on year for Q2 after most of the last 12 months saw the company‘s sales drop. Sales in the US rose by 3% compared to a year back – a welcome breath of fresh air after a year that saw customers opt for Puma‘s Fentys and Adidas‘ Yeezys over Nike‘s famed Air Jordans.
40% of Nike‘s total revenue comes from the North American market, so the rise in sales is vital for the company‘s financial health.
A winning strategy
Nike‘s recently-bolstered digital sales efforts have paid off. Digital platform sales grew by 34% in the last quarter – and took the top spot among ways that customers purchase their products. While some brands such as LVMH swear they will never move onto platforms such as Amazon, Nike has embraced the digital marketplace and increased its ad spending on it – which ultimately resulted in big gains.
Nike has also been acquiring tech companies that will help it transition into the e-commerce arena, and upped its social media game for influencer outreach and drops.
The company forecasts an even more auspicious sales climate over the upcoming year. Sales growth is expected to be sustained, which has analysts scrambling to reassess the value of Nike stock. The market at large has declared that it now has even more upside than it did.
Nike will also begin a buyback program which hopes to reintegrate $15 billion in stock. This kind of effort usually drives up share prices as the market perceives it as a show of confidence – which in turn leads to increased demand.