Nike shares surge as it sees North America improving
New York (AFP)
Nike shares surged in after-hours trading Thursday after it reported a jump in quarterly sales and signaled improving market conditions in North America.
The US sports apparel and sneaker giant, which has been plagued in its home market recently by an inventory glut and aggressive product introductions by Adidas, Under Armour and others, highlighted improving industry conditions.
"As we close (the third quarter), we now see a significant reversal of trend in North America, as momentum accelerates through the scaling of new innovation platforms," said Nike chief executive Mark Parker.
The company reported a loss of $921 million in the quarter ending February 28, due to $2.0 billion in one-time expenses connected to US tax reform. Nike reported $1.4 billion in profits in the year-ago period.
In contrast, revenues rose seven percent to $9.0 billion, thanks to big gains in sales in China and Europe/Middle East/Africa that offset a decline in North America.
Parker, at the outset of a conference call with analysts, alluded to the surprise resignation last week of Nike Brand President Trevor Edwards amid a drive to improve company culture.
Nike officials have said there were no "direct allegations" against Edwards, but Parker said, "We became aware of some behavioral issues that are inconsistent with Nike's values of inclusivity, respect and empowerment."
US business media have reported that Edwards was accused of protecting male employees who created a hostile work environment for women and workers from foreign countries.
Parker thanked Edwards, who will retire in August, and described the change as part of a move "to further evolve our culture and restructure our leadership."
"I'm committed to ensure that we have an environment where every employee can have a positive experience and reach their full potential."
A second Nike executive, Jayme Martin, also left the company, according to reports.
Shares of Nike rose 6.2 percent in after-hours trading to $68.40.
© 2018 AFP