Nike raises revenue forecast for namesake brand
The Nike Dunk High Id collection
Shares leaped $8.26 or 10.1 percent to $89.88 during afternoon trading on Tuesday.
Chief Executive Mark Parker told investors on a conference call that the sports gear and apparel maker, which reported better-than-expected fiscal fourth-quarter profit late on Monday, is ahead of schedule on meeting its targets.
The company has a target of $23 billion in annual revenue from its main Nike brand by 2015, according to Charlie Denson, president of Nike brand. Denson said on Tuesday that the company is on course to generate $24 billion to $25 billion in annual revenue by that year.
Denson also said Nike brand has "strong momentum" across all its categories for 2012.
China and Brazil are two of Nike's best opportunities for growth in coming years, Denson added.
Nike's Greater China business topped $2 billion in annual revenue for the first time recently, double the level of 2007, Denson noted.
"We plan on doubling it again over the next couple of years," Denson said.
Apparel makers, including Nike, are struggling with higher material, labor and freight costs.
However, Eric Sprunk, vice president, merchandising and product, for Nike brand, said the company will raise prices "in a more meaningful way across a broad array of lines" in fiscal 2012, which started in June.
Denson suggested that strong demand and innovation will help Nike offset higher costs.
"We are operating from a position of strength," Denson said. "We will not compromise our long-standing commitment to overall profitability."
(Editing by Gerald E. McCormick)
© Thomson Reuters 2017 All rights reserved.