Nike Inc (NYSE:NKE) has reaffirmed its commitment to creating shareholder value with a new $12 billion share buyback program. The program will come into effect once the current $8 billion plan is completed and will also involve the split of shares 2 for 1.
Stock Split
The proposed stock split will be in the form of a 100% stock dividend to be paid on December 23 to all stockholders as of December 9. A stock split however comes as a surprise as very few companies nowadays worry about their stock prices trading at stratospheric levels. Priceline Group Inc (NASDAQ:PCLN) is one of the stocks trading at highs of $1,200 with Amazon.com, Inc. (NASDAQ:AMZN) trading at highs of $600 nowadays opt after the split, Nike Inc (NYSE:NKE)’s outstanding shares of Class A and Class B will increase to 353 million and 1.36 billion respectively.
As part of an effort to return maximum value to shareholders, the sportswear giant has also confirmed an increase in its quarterly dividends. Shareholders will now enjoy a quarterly dividend of 32 cents a share up from 28 cents a share.
Nike’s Impressive Run
It’s been an impressive year for the Oregon-based company, which has already highlighted plans to boost its sales by about 60% to $50 billion by 2020. Growth in women’s and online businesses continues to affirm the company’s long-term prospects.
Nike stock is already up by 31% for the year as CEO, Mark Parker, maintains they are a clear leader in the sportswear business. The stock has more than tripled in market value since the past recession thanks to growth in South America and China. Market share also continues to grow Nike Inc (NYSE:NKE) having shrugged off competition from Adidas
Nike Inc (NYSE:NKE) continues to benefit from cultural trends that continue to favor its products. It’s athletically styled footwear, as well as clothes, continue to attract huge demand even on customers necessarily not planning a workout.
A growth in demand for the company’s products saw it post a 22% increase in net income for the fiscal year ended May. Sales for the year were up by 10% to highs of $30.6 billion.
Anthony Young
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