Increasing demand in sneakers and athletic gear from US shoppers are hitting Nike. As a result, revenue for Nike doubled, followed by surging shares.
Nike: the world vs China
Noted from Reuters, shares of Nike Inc on Friday jumped more than 15%, marking a record high. The shares surged after Nike’s giant full-year sales noted over $50 billion upon the rebound in sneakers and athletic gear demand from US shoppers.
Additionally, the revenue for Nike’s fourth quarter nearly doubled. The brand topped $12 billion for the first time. The figure further proves that Nike remains well-loved despite an ongoing boycott from its fast-growing China market.
A few months ago, Nike received backlash from China citizens for their comments on forced labour in Xinjiang. The situation went sour, resulting in a boycott from China and weaker sales from the country.
However, Nike was helped by a strong rebound from Europe and the United States. Rapid vaccination and easing restrictions in some part of the countries are attracting more people to shop for more stuff, including sneakers.
An analyst at Telsey Advisory, Cristine Fernandez commented, “The strong momentum in Nike’s brand globally is more than offsetting pressure in China and supply chain constraints”.
Still, analysts are optimistic that Nike might record a rebound from China soon. The reason behind this is due to the sales trends in China for June have reached 2020 levels, company executives noted.
In relation to this, Chief Executive of Nike, John Donahoe commented, “We’re confident about what we’re seeing in China … We’ve been in China for over 40 years … And today, we’re the largest sport brand there,” Reuters quotes.
Surge in Nike shares and other apparels
Following Nike’s success, around 13 brokerages have decided to raise their price targets. By far, Stifel holds the highest target on the Street at $213. The median target, Reuters notes, is $175.
Shares for Nike were trading at $152.10. On the same day, Nike hit an all-time high at $154.18 the earlier time.
The jump in Nike’s shares also pushed the S&P to a record high. Consequently, shares of German peers Adidas and Puma also grew 6% and% higher, respectively.
Read also: Nike and Adidas Shares Fall After China’s Boycott
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