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What: Shares of Nike (NYSE:NKE) were playing above the rim today, as the ubiquitous sneaker brand jumped as much as 12% after delivering a slam-dunk earnings report.
So what: Earnings per share from continuing operations grew 20%, to $0.73, from $0.61 a year ago, and the apparel maker benefited from a one-time gain of $203 million from the sale of its Cole Haan brand. Nike made a strategic decision last year to divest from the Cole Haan and Umbro brands so it could focus on its core brands. Revenues in the quarter were up 9%, to $6.2 billion, and grew in all regions except for China and Japan. Sales growth in North America, its biggest market, was particularly strong, increasing 18%, and gross margin improved for the first time in 10 quarters.
Now what: Nike is one of the world's strongest brands, and quarters like this one seem to put to rest any doubts about its continued growth potential. Despite its maturity at home, the Swoosh still pulled off a strong sales jump in the key North America region, which makes up 40% of sales. Upstarts like Lululemon athletica and Under Armour may be challenging the industry leader in some areas, but Nike has the star power, brand strength, and global reach to ensure its continued dominance. Factor in a solid share buyback program, and there are plenty of reasons to be confident in Nike's long-term value. You can stay on track by adding the stock to your Watchlist here.