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Nike smashes revenue, profit estimates on North America online boom
[BENGALURU] Nike Inc easily beat analysts'estimates for quarterly revenue and profit on Tuesday, powered by online sales for its Air Maxes and other shoes in North America, sending its shares up about 9 per cent.
Nike's brick-and-mortar sales have fallen off since the Covid-19 pandemic began, as malls and department stores around the world shuttered. To combat this, the footwear maker has turned its focus on direct-to-consumer sales, especially through its own website and apps.
The brand's digital sales surged 82 per cent in the first quarter ended Aug 31, with at least double-digit rises recorded in all regions.
In the prior quarter, Nike reported a 75 per cent increase in online sales, which are now nearly a third of total revenue - a goal Nike had previously set a for 2023.
Shares in the Portland, Oregon-based company have risen 16 per cent this year and are set to open on Wednesday at an all-time high of about US$127.
Nike has gained favour among shoppers this year with investments in marketing itself as a socially conscious company, prominently supporting movements like Black Lives Matter and Time to Vote.
Earnings before interest and taxes rose 18 per cent in North America, Nike's biggest market, with footwear sales up 11 per cent to nearly US$3 billion.
Tuesday's results are a far-cry from those of just a quarter ago, when Nike reported a surprise loss of US$790 million as retailers cancelled orders and people kept away from Nike stores in key markets like North America, Europe and China.
First-quarter sales in China, where the economy opened from lockdowns much earlier than in other parts of the world, rose 6 per cent led by factory stores and online sales.
Despite the pandemic and slow footfall, Nike said it kept nearly all its store doors open - more than in the last quarter - across North America, Europe, Africa, China and the Middle East.
However, some analysts say US retailers including Foot Locker and Dick's Sporting Goods - which canceled shipments in the early days of the pandemic - have begun making orders for inventory in the second half of Nike's fiscal year.
The company's net income rose to US$1.52 billion, or 95 cents per share, from US$1.37 billion, or 86 cents per share, a year earlier.
Revenue fell 0.6 per cent to US$10.6 billion.
Analysts had forecast a profit of 47 cents per share and revenue of US$9.15 billion, according to Refinitv IBES.