Shares of Nike (NYSE: NKE) shot up around 7% after the close Thursday when the company released earnings for the fourth quarter that were better than most analysts expectations. While that was good news, the news that likely caused investors to respond so favorably was the company confirming that it would indeed be working with Amazon (NASDAQ: AMZN). Previously Nike had publicly avoided working with Amazon, instead focusing on building out its internet presence. So what is this new partnership all about?
The basics of the deal were discussed on the earnings conference call with investors, where the management team said it would "directly sell a limited product assortment on Amazon's platform." This will include footwear, apparel, and accessories. The Wall Street Journal reported that the deal comes with strict guidelines for Amazon to better police the sales of counterfeit Nike products.
Back to the earnings, the company said that its international sales and direct to consumer business was the driving factors behind the beat. They also put a focus on their ability to keep overall costs down for the quarter as well. Specifically the company reported earnings per share of 60 cents where the street only expected 50. Revenue was $8.68 billion where analysts had only expected $8.63 billion. The company's net income also rose to $1 billion which was up from $846 million last year.
On the conference call the CEO, Mark Parker said the company would be "doubling down" on innovation , the supply chain and the Nike marketplace. He also commented that 2017 was the "year for making aggressive moves" which he hoped would set them up for a more accelerated growth trajectory. This was seen as very bullish by investors who have seen their retail holdings suffer so far this year.
For the year Nike shares have been up modestly, around 4%, but after this earnings beat and Amazon news shares are moving back to the highs of the year set back in March.