Nike Inc., the world's largest sporting-goods maker, posted first-quarter profit that topped analysts' estimates after the FIFA World Cup soccer tournament boosted sales.
Profit in the quarter ended Aug. 31 rose 23 per cent to $962-million (U.S.) or $1.09 a share, from $779-million or 86 cents a year earlier, the Beaverton, Ore.-based company said Thursday in a statement. The average of 25 analysts' estimates compiled by Bloomberg was 88 cents.
The World Cup, the world's most-watched sporting event, took place in Brazil during the quarter, boosting interest in Nike's soccer gear and apparel. U.S. consumers also have been buying more athletic apparel and footwear for everyday use, not just when working out or playing sports.
"The results across the board are extremely impressive," Brian Yarbrough, an analyst with Edward Jones & Co. in St. Louis, said in an interview. While the World Cup helped, "it's more than that. The product is resonating with consumers. They are dominating and keep taking market share."
Orders for the Nike brand for delivery from September through January rose 14 per cent, excluding the effects of foreign-currency exchange-rate fluctuations. Analysts estimated a gain of 10 per cent, on average, according to Consensus Metrix, a researcher owned by Wayne, N.J.-based Kaul Advisory Group. The measure is closely watched because investors view it as a proxy for future sales.
In North America, Nike's largest market, orders rose 15 per cent, topping an estimate of 9.8 per cent.
The shares rose 5.5 per cent to $84.10 at 4:44 p.m. in late trading in New York. Nike had gained 1.4 per cent this year through the close of regular trading, compared with a 6.4 per cent increase for the Standard & Poor's 500 Index.
Total sales rose 15 per cent to $7.98-billion, surpassing analysts' projections for $7.78-billion. While rival Adidas AG was the official sponsor of the World Cup, Nike spent heavily on its own campaign and building buzz for its gear.
Revenue in Nike's Greater China unit increased 18 per cent to $679-million. The company had been struggling to maintain growth there, its second-largest market, as shoppers there became choosier about which brands they buy. Futures orders in the unit advanced 6 per cent, trailing analysts' projections for a 6.5 per cent gain.
Adidas, the world's second-largest sporting-goods maker, cut its annual profit forecast last month amid slumping demand for golf equipment and an increase in production and marketing costs. The company's sales in the quarter ended June 30 rose 2.4 per cent.