Nike leaps 12% after crushing earnings expectations and accelerating online-sales shift
- Nike jumped as much as 12% on Wednesday after the sportswear giant trounced expectations for fiscal first-quarter
- Revenue of $10.59 billion beat the $9.11 billion estimate. Earnings per share reached $0.95, more than twice the $0.46 expectation.
- Much of the gains were fueled by 82% growth in online sales. The surge accelerated
Nike's plans to boost its online retailoperations.
- The company also issued fiscal 2021 guidance of high single-digit to low double-digit revenue growth from the year-ago period. Many retail giants have refrained from projecting performance because of pandemic uncertainties.
- Watch Nike trade live here.
Nike soared as much as 12% on Wednesday after beating expectations for fiscal first-quarter earnings and issuing optimistic guidance for the rest of the year.
The sportswear company continued to pivot toward online retail throughout the period. Digital sales rocketed 82% higher, with double-digit gains in North America, China, Latin America, and the Asia Pacific region. The increase offset slowed sales at Nike's stores, though nearly all reopened in the quarter after months-long lockdowns.
Here are the key numbers:
Revenue: $10.59 billion, versus the $9.11 billion estimate from analysts surveyed by Bloomberg
Earnings per share: $0.95, versus the $0.46 estimate
Inventory: $6.71 billion, versus the $6 billion estimate
Gross margin: 44.8%, versus the 42.9% estimate
"We're getting stronger in the places that matter most. And even in the midst of disruption, we are on the offense," CEO John Donahoe said in a Tuesday earnings call, according to a transcript provided by Sentieo.
Addressing the company's plan to source more sales from online operations, Donahoe deemed digital retail "the new normal."
"The consumer today is digitally grounded and simply will not revert back," he added.
Matthew Friend, Nike's chief financial officer, issued new fiscal 2021 guidance on the call: The company expects revenue to land in the high single digits to low double digits compared with fiscal 2020.
Most firms have refrained from issuing such projections. Friend said that though Nike's supply chain was still healing, "stronger-than-anticipated demand" would lift sales and drive "significantly" greater growth in the second half.
The fiscal first-quarter metrics marked a sharp rebound from Nike's previous earnings report, which detailed an unexpected quarterly loss of $790 million after the pandemic roiled in-store sales and prompted an inventory glut from closed outlets.
Nike closed at $116.87 per share on Tuesday, up 16% year-to-date.
Now read more
- Adani Ports Q1 profits declines to ₹1,091 crore
- Unicorns and startups should prepare for a longer funding winter, says SoftBank's Masayoshi Son
- Lok Sabha passes Energy Conservation Bill to promote non-fossil fuels
- Indian government is reportedly planning on restricting Xiaomi, Realme, Vivo and Oppo from the budget smartphone segment
- Less than 50% of children able to catch up with age-appropriate learning, claims survey