Nike Inc. is Surging to Start 2018

Nike Inc. (NKE) stock was up 4.52% in early afternoon trading on January 19. Shares have increased 7.1% in 2018 so far. The company released its fiscal 2018 second quarter results on December 21, 2017.

Diluted earnings per share fell 8% to $0.46 per share and revenue jumped 5% to $8.6 billion. Nike saw the biggest growth in the Europe, Middle East, and Asia, particularly China. Net income dropped 9% to $767 million due to a decline in gross margin and higher general and administrative costs.

On January 18 Nike announced that it had achieved 100% renewable energy in its North American operations after buying power from Avangrid Inc. This comes after Nike announced a green energy initiative in May 2016 that stated it planned to double its business while reducing its environmental impact by over 50%. Avangrid Renewables announced that construction will likely begin in the fall of 2018.

Nike leadership has been relatively optimistic over new U.S. tax reform passed by the Trump administration and the Republican-controlled House and Senate. Tax reform will see corporate taxes in the U.S. slashed from 35% to 21%. However, Nike will pay a one-time repatriation tax that will negatively impact its fiscal 2018 third quarter tax bill.

Nike stock has climbed 26.5% year over year. The company has alleviated pricing pressures in domestic markets and growth in its direct-to-consumer business should continue to propel it in 2018. The company also last announced a quarterly dividend of $0.20 per share representing a 1.2% dividend yield.