Sportswear giant Nike (NYSE:NKE) is Wednesday’s biggest premarket gainer after its stock rose by slightly over 6% ahead of the opening bell following the release of its first quarter results.
After closing Tuesday at $87.18 Nike rose by 6.04% in pre-market hours to reach $92.45.
With the pre-market gain, Nike’s stock has reached a new record high after failing to climb above the $90 resistance level several times this year. Among the day’s largest pre-market gainers, Nike also enjoyed the highest pre-market volumes.
The sportwear giant’s stock record high follows the release of first quarter earnings for the fiscal year 2020 which beat analysts’ estimates. During the June-to-August quarter, Nike managed to weather the storm created by its social justice campaigns in the U.S. by growing sales in Greater China by double digits.
According to CNBC, Nike saw its sales in Greater China grow by 27% compared to North America where sales went up by 4%. Overall, revenues for the quarter rose by 7% to reach $10.66 billion against the $10.44 that analysts had been expecting. Nike also recorded earnings per share of $0.86 beating analysts’ estimates of $0.70.
During the June-August quarter Nike once again faced backlash from the political right. This was after it withdrew a trainer that had been scheduled for release to mark Independence Day. As CCN.com reported at the time, this was the Betsy Ross-themed sneakers that bore an image of an early U.S. flag that was used from 1777 to 1795 when there were only 13 states in the union.
The backlash from conservatives seemed more severe than a previous one witnessed in 2018 when Nike featured ex-NFL quarterback and political activist Colin Kaepernick on one of its ads. This was due to the voicing of criticism from national as well as mainstream Republicans who publicly vowed to boycott the sportswear giant’s products.
Arizona Governor Doug Doucey even went as far as to direct an agency to withdraw financial incentives that Nike was going to receive for locating a factory in the Grand Canyon State.
Besides the fact that Nike’s June-August quarter beat analysts’ estimates, the sportswear giant’s stock is also likely to benefit from a 4-year share buyback program that is currently underway. While Nike has allocated $15 billion for the program by the end of last month only $2 billion had been used, about 13%:
As of August 31, 2019, a total of 23.5 million shares had been repurchased under this program for approximately $2.0 billion.