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This is why Nike stock is crushing it: Analyst

Shares of Nike were up 4 percent on Friday, and it's all about future orders the company reported in quarterly earnings, UBS analyst Michael Binetti said.

Future orders are orders from a company's retailers to be delivered in the next five to six months, making the metric a leading indicator of sales, Binetti said.

Nike said future orders for its branded shoes and clothing scheduled for delivery from March through July increased 11 percent, excluding the impact of currency changes. Analysts had expected global futures orders to rise 9.9 percent, according to Consensus Metrix.

Binetti called the 11 percent rise "remarkable" because the company was filling orders for World Cup merchandise one year ago. Nike got a boost in 2014 because retailers that do not typically carry sports apparel were stocking their shelves with World Cup products, setting up a "very difficult comparison" for this past quarter, he added.

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During the company's earnings call, Nike said future orders were up in the mid-teens excluding the impact of the World Cup.

"Underlying trends for demand here for Nike product are very, very strong," Binetti said on CNBC's "Squawk Box."

Nike is reaping the benefits of a shift in consumer tastes as more people, especially women, opt for sports apparel like yoga pants rather than jeans, he added.

Footwear, a segment in which Nike has the most differentiated product, is seeing high growth, as well, he said, noting that Nike has a nearly 90 percent market share in the strengthening basketball sneaker category.

Nike topped Wall Street's earnings estimates on Thursday, though sales figures came in below expectations as it struggled with the negative impacts of a stronger dollar.

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The sports apparel retailer reported fiscal third-quarter earnings of 89 cents per share on revenue of $7.46 billion, versus projections for 84 cents per share on $7.62 billion in sales, according to a consensus estimate from Thomson Reuters.

Management said on its conference call it expects fiscal 2016 revenue growth in the high single-digit range, below its previous expectations of above the mid-teens. It sees full-year earnings coming in below its long-term targets.

"Our strong third-quarter results show that our growth strategies are working, even under challenging macroeconomic conditions," Nike President and CEO Mark Parker said in a statement.

The Beaverton, Oregon-based company had reported earnings of 75 cents a share on $6.97 billion in revenue during the year-earlier period.

For the quarter ended Feb. 28, revenue increased 7 percent year over year, with sales at its Nike and Converse brands rising 11 percent and 33 percent, respectively, on a currency neutral basis. Net income climbed 16 percent to $791 million.

The sportswear maker's gross margin increased significantly to nearly 46 percent thanks to a "continued shift in mix to higher-margin products, partially offset by higher product input and warehousing costs," Nike said.

The company generated more than half of its revenue outside North America in the previous quarter. A strengthening dollar relative to key global currencies poses a challenge for Nike, Parker said in its December earnings call.

The dollar has jumped nearly 10 percent against a basket of leading currencies so far this year.

Nike shares have surged 24 percent in the last year.

—CNBC's Karma Allen and Jacob Pramuk contributed to this article