By Andria Cheng, MarketWatch NEW YORK (MarketWatch) -- Nike Inc. shares jumped Thursday after the No. 1 athletic-shoe company reported better-than-expected fiscal third-quarter profit and orders, driven by improved demand in Western Europe and China and in categories such as apparel. Nike (NKE 74.43, +3.55, +5.01%) shares rose 3.9% to $73.67 in early trading, making it the lead gainer in the S&P's textiles and apparel group. They've risen 61% in the past year. Orders, excluding the impact of currency translations, rose for the first time in at least a year. Demand for products such as apparel and running in the U.S. also improved, which will benefit Nike as those are among the increased merchandise focus of its top customer Foot Locker Inc. (FL 14.62, -0.05, -0.34%) , analysts said. Analysts expect demand going forward to continue to be driven by new products such as the lightweight Lunar Glide running shoes, Pro Combat football gear as well as by events such as the World Cup in South Africa and golf athlete Tiger Woods' expected return to the Masters tournament. "We see visibility to sustained top-line growth," said FBR Capital Markets analyst Eric Tracy, who upgrades Nike's stock to outperform from market perform. "Nike's dominant position in the athletic footwear industry allows the company to capitalize on a strengthening product cycle, as evidenced by accelerating future orders. The company has gained its U.S. footwear market share by almost 2 percentage points in the third quarter, said UBS analyst Michael Binetti in a report, citing research firm NPD Group. Nike has gained market share from rivals including Adidas AG (ADDY.Y 25.73, -0.27, -1.04%) and Under Armour Inc. (UA 29.03, +0.06, +0.21%) on different fronts, analysts said. The Beaverton, Ore.-based Nike said late Wednesday its profit in the third quarter ended Feb. 28 more than doubled to $496.4 million, or $1.01 a share, from $243.8 million, or 50 cents a year earlier. Sales, which include contribution from other brands such as Cole Haan and Converse, rose 7% to $4.73 billion. Analysts, on average, estimated Nike to earn 89 cents a share on sales of $4.59 billion, according to FactSet. Worldwide orders of shoes and apparel for delivery between March and July, an indicator of future sales, rose 9% to $7.1 billion and would have risen 6% excluding the impact of currency translations. Both numbers exceeded Wall Street expectations. Gains were driven in North America, Western Europe, China and other emerging markets. They declined in Central and Eastern Europe as well as in Japan. Improved consumer demand, cited by retailers such as Dick's Sporting Goods Inc. (DKS 26.55, -0.08, -0.30%) , has boded well for Nike, analysts said. In North America, revenue increased 1% to $1.7 billion, led by a 6% gain in apparel sales. Footwear sales fell 1%. Western European sales rose 4% to $929 million, led by an 8% increase in footwear sales. Central and Eastern Europe sales dropped 8%. Greater China revenue jumped 10% to $458 million, including a 12% increase in footwear revenue and an 8% gain in apparel. Sales in Japan fell 7%. Emerging markets sales surged 43% to $509 million. Other businesses including Hurley and Cole Haan jumped 13% to $656 million. Chief Executive Mark Parker also has controlled inventory better to reduce discounts and consolidate factories to help lower product sourcing costs, according to analysts. Nike's selling, general and administrative expenses rose 16% to $1.6 billion while its gross margin increased to 46.9% from 43.9% in the same period last year, also beating Wall Street expectations.

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