Nike last week announced the dividend increase of 12% or 3 cents a share, continuing the 19th consecutive year of increasing dividend payments, following a successful and rapid “digital transformation”.
On Friday, shares of NIKE Inc. (NKE) rose after announcing increase in quarterly dividend by 12% or $0,275 from $24.5 to $27.5 per share (common class A and B), which represents a yield of 0.83%. The Nike dividends are payable December 29 to shareholders registered at the close of the working day on 7 December.
The Board of Directors of Nike, suggests that the company increases profits and are likely to publish a strong financial report for the 2nd quarter, which is expected on 18 December.
Nike news also contrasts with the General trends in the market, because many companies were forced to stop paying dividends in order to compensate for the negative effects of the pandemic COVID-19.
This is the 19th consecutive year, as Nike increases dividend payout that reflects the financial success of the company, including through a successful “digital transformation”.
In September, Nike said it expects that sales in the second half of the fiscal year (ending in may 2021), “rise significantly”, as sales will recover after the recession, when retailers have canceled orders, and quarantine measures have limited visiting physical stores in key markets.
For the first fiscal quarter ended August 31, Nike reported a slight fall of revenues of 0.6% (compared value) to $10.6 billion, well above the $6,31 billion in the previous quarter. Earnings per share increased by 10% compared to the same last year.
The main reason for this success is the growth of digital sales at 82%, while their share in total sales of the company rose to at least 30% – threshold, which Nike had previously planned to achieve by 2023.
“The company is growing faster than sales, due to the acceleration of the process of digital transformation and focus on increasing direct sales to consumers” – commented the experts at Action Alerts PLUS.
At the beginning of the pandemic guide Nike has suspended the redemption of shares, but if quarterly figures do much to improve, this could allow the company to resume the program. Investors find out about this in an upcoming report in December.
Nike shares, which this year grew by 31.3%, more than doubled since the March low, as the company cut costs by reducing corporate jobs and targeted use of resources and investment in digital sales.