Shoppers, some wearing PPE (personal protective equipment), of a face mask or covering as a precautionary measure against COVID-19, queue to enter a recently re-opened Nike store at Gunwharf Keys shopping centre in Portsmouth, southern England on June 16, 2020.
Adrian Dennis | AFP | Getty Images
Nike‘s quarterly earnings and revenue trounced analysts’ estimates, the company reported Tuesday, as its online sales soared 82%.
Parents were seen stocking up on sneakers for their kids this back-to-school season, and business finally started to pick back up overseas amid the coronavirus pandemic.
“In this dynamic environment, no one can match our pace of launching innovative product and our brand’s deep connection to consumers,” CEO John Donahoe said in a statement.
Its stock jumped more than 8% in after-hours trading.
Here’s how the company did compared with what analysts were expecting, based on Refinitiv data:
- Earnings per share: 95 cents vs. 47 cents, expected
- Revenue: $10.59 billion vs. $9.15 billion, expected
Its net income climbed to $1.52 billion, or 95 cents per share, compared with $1.37 billion, or 86 cents per share, a year earlier. That was better than the 47 cents per share analysts were expecting.
Nike’s revenue for the period ended Aug. 31 fell 0.6% to $10.59 billion from $10.66 billion a year earlier. That also came in better than the $9.15 billion forecast by analysts.
Sales in China rose 6%, it said, while sales in North America, Nike’s largest market, were down 2%. But North American sales of $4.23 billion were still ahead of analysts’ forecast for $3.39 billion.
The first-quarter results are a strong reversal for Nike after it experienced a bigger slump earlier in the summer. The company at the end of June reported an unexpected loss, as its revenue tumbled 38% year-over-year with a number of its stores temporarily shut.
Nike said Tuesday that the majority of its stores were back open during the first quarter. Still, traffic in stores is down from a year earlier, it said, in part due to Covid-19 “safety related measures.” Like many other retailers, Nike is still limiting the number of people who can come in its stores at once, to try to help curb the spread of the virus.
Nike’s inventories totaled $6.7 billion at the end of the latest period, up 15% from a year earlier but down 9% from the prior quarter. Nike said it “continued to strategically manage excess inventory resulting from a significant number of door closures and lower wholesale shipments globally.”
The biggest sneaker-maker in the U.S. has been investing in its website, mobile apps and owned stores, as more consumers are steering clear of department stores and shopping malls.
“Nike is recovering faster based on accelerating brand momentum and digital growth,” CFO Matt Friend said.
Nike shares as of Tuesday’s market close are up about 15% year-to-date. The company has a market cap of $182.5 billion.