What happened

Shares of Nike (NYSE:NKE) gained 11.1% last month, according to data provided by S&P Global Market Intelligence.

The expectations implied in the sneaker giant's high valuation were validated when the company announced another stellar quarter in late September, which sent the stock to an all-time high

A multicolor Nike basketball shoe.

Image source: Nike.

So what

For the fiscal first quarter, revenue increased by 7% year over year to $10.1 billion. Adjusting for currency changes, revenue climbed 10%. CEO Mark Parker said, "Nike's strong product innovation, combined with our industry-leading digital experiences, continue to deepen our consumer relationships around the world." 

Nike's digital growth continues to impress, with the digital business in North America growing over 30% on a constant-currency basis. Worldwide digital sales grew 42% adjusted for currency, which CFO Andy Campion credited to "enhanced digital services and the expansion of our app ecosystem internationally." 

Most impressive was the performance on the bottom line, where earnings per share soared 28% year over year. The performance was driven by a combination of a higher gross margin, a lower tax rate, and share repurchases. Earnings came in well above analysts' expectations, which called for $0.70 per share, but Nike reported $0.86 in EPS. 

Now what

Management continues to see strong consumer momentum for the swoosh brand. Guidance calls for more of what we saw in the last quarter. For the full year, the company expects revenue growth in the high single digits, coming in slightly ahead of fiscal 2019 in terms of year-over-year growth. Gross margin is expected to improve by another 0.50 to 0.75 percentage points, which also includes the impact from tariffs in the short term.

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