Nike’s plans to transform into a tech company seem to be succeeding

Nike shares edged higher on Sunday as the sportswear giant announced plans to double its dividend to $0.15 per share by 2020. Investors shrugged off worries about Nike’s plans to transition from a shoe…

Nike’s plans to transform into a tech company seem to be succeeding

Nike shares edged higher on Sunday as the sportswear giant announced plans to double its dividend to $0.15 per share by 2020.

Investors shrugged off worries about Nike’s plans to transition from a shoe maker to an athletic tech company, said analyst Matt Powell of The NPD Group.

“Nike is not going back to the bad old days of trying to be everything to everyone,” Powell said. “They’re smart enough to know they’re not going to replace the hoodie you wear to church, but they can address the long-term growth areas of retail like running.”

The dividend increase extends Nike’s streak of annual increases to 20 years.

The company had previously promised to increase its annual dividend to between $0.15 and $0.20 per share by 2020. During a conference call with analysts on Sunday, Nike CEO Mark Parker said that the company believes “a one dollar increase at a minimum” is possible after 2020.

“It’s great to see continued innovation and being able to raise the dividend in combination with the share repurchase,” Powell said.

Nike, which plans to spend a total of $12 billion on stock buybacks and dividends over the next two years, also announced its earnings for the third quarter, which ended Oct. 31. Net income was up 24 percent to $1.52 billion from $1.25 billion last year. Revenue rose 9 percent to $9.4 billion from $8.6 billion in the same period last year.

“Our earnings and revenue grew significantly in the third quarter, and we continue to invest in the long-term fundamentals of our business, including products, retail and digital,” Parker said in a statement.

Nike, based in Beaverton, Oregon, has been making a push into the more expensive athletic tech market in recent years. It launched its “adaptive” running shoe in August, which it billed as the first piece of athletic footwear to change shape and fit depending on the runner’s performance. Nike also recently expanded its digital membership service, MyFitnessPal, into more than 40 countries in Europe, and plans to expand that product to the U.S. next year.

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