Nike Inc.’s home market is getting its mojo back.
The sneaker giant’s North American sales rose for the first time in four quarters, a sign that the company’s new products are catching on with U.S. shoppers. The performance beat Nike’s own forecast for flat sales in the region. The shares rose as much as 5.9 percent in late trading.
For more than a year, the Beaverton, Oregon-based company has been promising investors that slowing growth and revenue declines in its largest market were only a short-term trend . Nike said the lion’s share of the blame fell on U.S. retail partners, which have been closing stores amid a broader industry retrenchment. It also faces a rejuvenated Adidas AG, which has regained its cachet with consumers.
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New products are “driving significant momentum in our international geographies and a return to growth in North America,” Chief Executive Officer Mark Parker said in a statement.
Even though Nike’s 3 percent growth in North America is short of Adidas’s recent performance, the sportswear company has seen growth accelerate overseas, where it generates more than half its revenue. This has also boosted investor confidence, driving shares up 34 percent over the past 12 months.
China sales rose 35 percent in the quarter ended May 31, while revenue from Asia Pacific and Latin America gained 12 percent.
Nike’s earnings got a big boost from the corporate tax cuts passed last year. The company’s rate fell to 6.4 percent -- half of its rate a year ago -- and it shaved $82 million off its tax bill.
Overall sales were $9.8 billion, surpassing analysts’ average estimate of $9.4 billion.
“Everything is pointing in the right direction,” said Chen Grazutis, an analyst for Bloomberg Intelligence. “The top line is clicking again, and they are gaining traction with new products.”
Nike also announced a $15 billion share buyback program, which will begin when its current $12 billion program concludes in the current fiscal year.
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