Nike shares jump on earnings beat, Amazon deal
Nike, the world's largest footwear maker, said on Thursday it would launch a pilot program with Amazon.com to sell a limited product assortment on its website.
Shares of the Dow component, which also reported quarterly profit and sales that topped estimates, were up 8.2 percent at $57.54 in trading after the bell.
Nike's comments confirmed an earlier report, which said the footwear maker was seeking to directly sell its products on Amazon, rather than through third-party and unlicensed dealers.
"We're looking for ways to improve the Nike consumer experience on Amazon by elevating the way the brand is presented and increasing the quality of product storytelling," Nike Chief Executive Mark Parker said on a post-earnings call.
Nike's revenue could increase by $300 million to $500 million in the United States, or 1 percent in global sales, if the pilot turns into a more meaningful partnership, Goldman Sachs analyst Lindsay Drucker Mann said in a client note.
Beaverton, Oregon-based Nike, which saw greater demand for its core brands including Jordan, and in sportswear and running categories, said its selling, general and administrative expenses fell 4 percent to $2.7 billion in the fourth quarter ended May 31.
In the face of intense competition in North America, Nike has been focusing on its new and core brands such as ZoomX, Air VaporMax and Nike React. The company earlier in June said it would cut 2 percent of its global workforce and trim a quarter of its shoe styles as it looks to become nimbler.
While Nike's North America sales were flat, sales in Western Europe, its second-biggest market, were up 4 percent in the fourth quarter.
Sales in Greater China jumped 11 percent, the company said.
In China, Nike has revamped stores and increased online efforts with Alibaba Group Holding Ltd's Tmall in a bid to reinvigorate demand in the world's No. 2 economy.
Revenue rose 5.3 percent to $8.68 billion, beating analysts' average estimate of $8.63 billion, according to Thomson Reuters I/B/E/S.
Excluding certain items Nike earned 60 cents per share, well ahead of analysts' average estimate of 50 cents.
(Reporting by Gayathree Ganesan in Bengaluru; Editing by Martina D'Couto)