Nike Stock Rally: Is it earnings or a deal with Amazon?

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    Nike recently reported that its net income for the three months through May grew by 19 percent year-over-year to 1.0 billion dollars (0.9 billion euros). Revenue for the quarter rose five percent to $8.7 billion. The results clearly exceeded analysts’ expectations. The share rose by just under eight per cent after the stock market. On the NYSE today, the stock is about 9 percent upwards.

    In addition to the business figures, investors were also very pleased with the announcement that the company would set the course for a partnership with Amazon. After Nike had long opposed the direct distribution via the online retailer and has only been represented there by third-party providers, one wants to sell some products themselves.

    Nike is looking for ways to provide its customers with a better shopping experience at Amazon, said Mark Parker. This is about an improved type of brand presentation. While Amazon is already a lot of Nike products available, but there are so far unlicensed dealers, so the company has little influence on how the goods are marketed on the platform.

    “NIKE continues to create both near-term wins in today’s dynamic environment and a lasting foundation for future growth,” said Mark Parker, Chairman, President and CEO. “Through our Consumer Direct Offense, we’re putting even more firepower behind our greatest opportunities in Fiscal 2018. It will be a big year for NIKE innovation and we’ll bring those stories to life through deeper consumer connections in our key cities around the world.”

    The Amazon pilot program, according to experts, could help overcome the current weakness on the US home market. As in the preceding quarter, business transacted at last only internationally, especially in China and other emerging markets. In the US, where the German archrival adidas is once again intensifying pressure, growth has stagnated.

    Nike also fought again with the strong dollar, which reduces foreign income after conversion into US currency. Without this effect, consolidated sales would have risen by seven percent. For the entire fiscal year 2017, Nike increased its revenues by six percent to 34.4 billion dollars. The profit increased by 13 percent to the bottom line 4.2 billion dollars.

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    Zac Berry is presently a full time editor at Market Morning. He covers the M&As and follows live market commentary. Before joining Markets Morning, Zac Berry worked with a start-up, where he worked in the capacity of a Team Leader tracking company events and results. Born in the U.A.E, he spent most of his growing up years in Dubai. Currently, he resides in U.S. and is pursuing his charter in Accountancy.

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