Nike Inc (NYSE: NKE) reported stronger-than-expected results for its first quarter on Tuesday.
The Beaverton, Oregon-based athletic wear manufacturer reported evenue increased to $10.7 billion in the first quarter, up 7% on a reported basis and up 10% on a currency-neutral basis, driven by growth across all geographies.
According to CEO Mark Parker, "Our strong start to FY20 highlighted the depth and balance of NIKE’s complete offense.
"NIKE’s strong product innovation, combined with our industry-leading digital experiences, continue to deepen our consumer relationships around the world."
Diluted earnings per share for the quarter came in at $0.86, an increase of 28 percent driven primarily by strong revenue growth and gross margin expansion.
Gross margin increased 150 basis points to 45.7% primarily due to higher average selling prices and margin expansion in NIKE Direct, partially offset by impacts from changes in foreign currency exchange rates and higher product costs.
Selling and administrative expense increased 9% to $3.3 billion. Demand creation expense was $1.0 billion, up 6% primarily driven by higher advertising expenses and sports marketing investments.
Operating overhead expense increased 10% to $2.3 billion driven by continued investments in transformational capabilities, particularly in NIKE Direct and global operations.
NIKE said net income increased 25% to $1.4 billion driven primarily by strong revenue growth and gross margin expansion while diluted earnings per share increased 28% to $0.86 reflecting a 2% decline in the weighted average diluted common shares outstanding.
Shares in the "Just-do-it" company opened Wednesday soared $5.09, or 5.8%, to $92.27
