Nike just did it.
Nike Inc. (NKE) - Get Report shares opened at a record high Friday after the world's biggest sports apparel company blasted quarterly earnings forecasts and unveiled a $15 billion buyback plan, prompting a sting of price target upgrades from major investment banks.
Nike said a renewed focus on direct-to-consumer sales, fostered by a revamped online strategy and a partnership with Action Alerts PLUS holding Amazon Inc. (AMZN) - Get Report , helped boost North American sales more than 2.7% in the three months ending in May, the company's fiscal fourth quarter. That helped take overall sales 12.8% higher to $9.79 billion and translated into a bottom line of $1.14 billion, or 69 cents per share, that topped analysts forecasts. The Eugene, Ore.-based group now sees fiscal 2019 revenue growth in the "high single digit range" and forecast margin expansion of at least 50 basis points.
We had a strong fourth quarter with results that confirm why we're so excited about potential of the Consumer Direct offense," CEO Mark Parker told investors on a conference call late Thursday. "Our digital offense is transforming Nike from how we connect with consumers to how we deliver products. This is a major shift from operating models of the past to a new digitally powered model of the future."
"With a more focused strategy, we're running a more complete portfolio with better balanced growth across geographies and categories," Parker added.
Nike shares were marked 10.24% higher at the opening bell in New York Friday to change hands at $79.05, the highest on record and move that takes the stock's year-to-date advance past 25%. That compares to a 15.3% dollar-adjusted gain for German rival Adidas AG (ADDYY) over the same time period.
Not all was great for Nike though: as TheStreet points out, Nike's key Jordan brand continues to perform poorly.
Several investment banks also boosted price targets for Nike in the wake of the better-than-expected earnings and the announcement of a new $15 billion share buyback plan that will commence in its current 2019 fiscal year.
Barclays lifted its price forecast to $85 from $8 while JPMorgan Chase took its price target $6 higher to $76 per share. Credit Suisse sees near-term potential for the stock to reach $90.
The North American gains, the first in a year, suggest Nike is finding some traction against its European rival, which has been gaining steady market share increases thanks to its early moves into online sales a resurgence for its 'Originals'-branded merchandise.
Adidas is also having much great success in its current World Cup, where it is an official partner with the FIFA organising committee and has the exclusive rights to its logo on match balls and referees' uniforms.
Parker, however, noted the recent success of Nike-sponsor athletes in major sporting events, including the French Open tennis and NBA Basketball championships.
"Kevin Durant won back-to-back NBA titles and Finals MVP awards, Parker said. "Eliud Kipchoge won the London Marathon in our new 3D printed uppers with Flyprint and ZoomX, Brooks Koepka winning the U.S. Open for the second year in a row, and at the French Open, Simona Halep won her first title, and Rafael Nadal won his unrivalled 11th at Roland Garros."