Naik shares were up 13% in extended trading on Tuesday as the company reported an 82% increase in online sales and offered an outlook seeking an increase over the holidays.
The company used the Coronavirus pandemic as an opportunity to accelerate its digital business and expanded its womenswear division by 200%. With parents stockpiling materials from school to noon and restoring their commercial activity in key markets like China, Nike said its brand in Jordan appears “stronger than ever”.
The company has also introduced a new outlook for fiscal 2021, which could lead to double-digit sales from the single-digit highest one year earlier. The approach comes at a time when many of its competitors are avoiding financial guidance.
“We know the digital number is the new norm. Consumer John Donahue stated that the consumer is digitally grounded today and the bus is not coming back.
Based on the duplicated data, analysts predicted how the company compared:
EPS: 95 cents versus 47 expected cents
Revenue: $ 10.59 billion versus $ 9.15 billion expected
In the first quarter ended August 31, net income rose to $ 1.52 billion, or 95 cents a share, from $ 1.37 billion, or 86 cents a share, a year earlier. 47 cents a share was better than analysts had expected.
Nike’s revenue fell 0.6% to $ 10.59 billion from $ 10.66 billion the year before, but analysts put that at $ 9.15 billion.
Sales in China were up 6%, while in North America, revenue in Nike’s largest market decreased by 2%. But North America sales of $ 4.23 billion were still ahead of analysts’ forecasts of $ 3.39 billion.
Its most recent results were a strong reversal for Nike as it saw a significant slowdown in the previous quarter. At the end of June, Nike reported an unexpected loss, as its revenue fell 38% year-on-year, hurt by the temporary closures of stores during the pandemic.
But in the first quarter, Nike said most of its reserves were open, even though the traffic was lower than last year’s levels. Like many other retailers, Nike continues to limit the number of people who can visit its stores at one time, to help prevent the virus from spreading. But when people travel, they come with the intention of buying, and Nike said conversion rates have gone up.
Meanwhile, Nike’s inventions totaled $ 6.7 billion at the end of the period, up 15% over the previous year, but down 9% from the previous quarter. The company said it continued to “strategically manage excess inventory resulting from door closings and the decrease in bulk shipments globally.”
The largest sports shoemaker in the United States is investing in its website, mobile app, and store, as more consumers clue about the supermarkets and malls. It opens major markets as well as major locations to serve as the hub for picking up online orders. Its investments help increase its relative strength compared to other retailers who have been in the grip of the pandemic. Brooks Bruce, J. Crowe, J. Dozens, including Benny and Neiman Marcus, have filed for bankruptcy protection this year.
A number of brands and retailers focused on athletes have also released results in recent weeks, including Lululemon, Dick’s Sporting Goods, and Peloton, as consumers search for casual wear and exercise equipment during the Kovid-19 crisis. Nike and its partners have taken advantage of this trend.
The pandemic is clearly accelerating Nike’s digital potential. The company stated that its digital sales now account for at least 30% of total quarterly sales, which were already targeted by 2023.
“Nike is recovering rapidly based on the brand’s pace and accelerating digital growth,” Chief Financial Officer Matt Friend said Tuesday.
Looking at the first half of fiscal 2021, Friend said Nike expects them to be roughly flat compared to the previous year. He said demand should increase in the entire half-year as consumers help Nike meet full-year expectations.
Nike shares are nearly 15% year-to-date in the Tuesday market. The company has a market value of $ 182.5 billion.