Swoosh is the sound Nike Inc. (NKE) is making through the first half of the year as it races upward and onward, leaving the rest of the market in the dust. Shares of the popular sports apparel brand are up more than 18% since the start of 2018, and may have even more room to run as international growth led by China picks up speed and U.S. sales begin to rebound.

Cowen & Co. analyst John Kernan, seeing strength in the company’s focus on product innovation and customer retail experience, recently raised his price target from $68 to $80, but forecasting on the basis of more optimistic estimates on future growth through to the end of 2020, he can imagine a scenario where the stock rises another 35% to hit $100, according to Barron’s. (To read more, see: Nike Stock Hits All-Time High Ahead of March Report.)

 How Nike Is Racing Ahead        Stock YTD
 Nike  18.2%
 S&P 500   2.9%

Nike's Turnaround

Kernan emphasizes Nike’s resonance with customers in both product offerings and in-store experiences. He specifically notes the company’s retro styles finding appreciation with customers, and mentions, “Nike’s efforts to tighten supply and focus on segmentation in experiential retail and its own direct-to-consumer [segment] is driving success,” as quoted by Barron’s.

In the company’s most recent quarter ending Feb. 28, revenue grew approximately 7% to $8.98 billion, ahead of expectations of $8.85 billion. Much of that growth was led by China where sales were up 24%. Sales in Europe, the Middle East and Africa were up by 19%, and grew by 13% in the Asia Pacific and Latin America, according to CNBC.

What's Driving Nike's Growth
 *Soaring Sales In China
 *Turnaround of U.S. Sales
 *New Products, New Store Experiences

While North American sales were down 6%, CFO Andy Champion is confident that sales will turn positive by the first half of fiscal year 2019, the latter half of this calendar year. With the revamping of merchandise and orders from North American partners building, future sales should improve.

Currently, consensus estimates put this current quarter’s sales for all divisions at $9.4 billion, a rise of 8.4% from the same quarter a year ago. Earnings are estimated at $0.64 per share, implying year-over-year growth of 6.7%.

Beating the Skeptics

This optimism for the iconic sports apparel company is a breath of fresh air for the bulls as there has been much skepticism over Nike’s future with many wondering whether or not the company has lost its spark to competitors like Adidas. For the past number of years, Adidas U.S. sales growth has been far outpacing that of Nike’s, according to a separate article by Barron’s published late last summer.

The growth of e-commerce has also made a dent with Amazon capturing the number two spot behind Wal-Mart for the U.S. apparel market with a 7.4% total market share at the end of 2016. To stay in the game Nike announced last year that it would start selling some items directly through Amazon. With customers starting to resonate with the company’s products again, the Nike bulls can only hope that such moves will help fend off the growing dominance of e-retail giants. (To read more, see: Nike, Estee Lauder, Constellation Brands Are Amazon Resistant-Logan Capital.)

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