Nike shares hit record high as sales surge after lockdown


Nike shares jumped more than 15% to an all-time high on Friday after the sportswear giant forecast annual sales of more than $ 50 billion, amid pent-up demand for sneakers and gear sportswear from American buyers.

The company’s fourth-quarter revenue also nearly doubled, surpassing $ 12 billion for the first time and eclipsing a weaker-than-expected performance in its rapidly growing Chinese market.

“The strong momentum of the Nike brand globally more than offsets the pressure in China and supply chain constraints,” said Cristina Fernandez, analyst at Telsey Advisory.

A rapid vaccination campaign and the easing of restrictions in Europe and the United States have encouraged people to shop, freeing up demand for expensive items, including sneakers.

These factors have helped Nike more than make up for weak sales in China, which have been hit by calls to boycott global brands for their comments on forced labor in Xinjiang.

Still, analysts are optimistic about a rapid rebound in demand in the region, with company executives noting that sales trends in China for June are already reaching 2020 levels.

Man looking at window of various Nike sneakers
The easing of pandemic restrictions in the United States has spurred an increase in purchases and demand for expensive items, like Nike sneakers.
Getty Images

“We’re confident about what we’re seeing in China… We’ve been in China for over 40 years… And today we’re the biggest sports brand there,” Nike CEO said Thursday, John Donahoe. “We are a brand of China and for China.”

At least 13 brokerages have raised their price targets, with Stifel’s target of $ 213 being the highest on the street. The median target is $ 175.

Nike shares were trading at $ 153.28 at 1:30 p.m. ET, after hitting an all-time high of $ 154.18 earlier Friday.

The jump also helped push the S&P 500 index to an all-time high, while pushing shares of their German counterparts Adidas and Puma up about 6% and 2%, respectively.

“We are encouraged by increased certainty about the pace and strength of the recovery… The worst is now behind (for Nike),” said Barclays analyst Adrienne Yih.