Nike smashes revenue, profit estimates on China demand, online boom
10:03:00, Sep. 23, 2020
The brand's digital sales surged 82 percent in the first quarter ended August 31, with at least double-digit rises recorded in all regions.
Nike Inc's online sales of Air Maxes and other shoes in North America drove quarterly profit and revenue ahead of Wall Street estimates and led the world's largest athletic shoemaker to forecast better-than-expected sales for the year.
First-quarter sales in China, where the economy opened from lockdowns much earlier than in other parts of the world, rose six percent, led by factory stores and online sales.
Nike's brick-and-mortar sales have fallen since the COVID-19 pandemic began, as malls and department stores were shuttered around the world.
The brand's digital sales surged 82 percent in the first quarter ended August 31, with at least double-digit rises recorded in all regions. In the prior quarter, Nike reported a 75 percent increase in online sales – nearly a third of total revenue, a goal Nike had previously set for 2023.
"We know that digital is the new normal. The consumer today is digitally grounded and simply will not revert back," Nike Chief Executive John Donahoe said.
Earnings before interest and taxes rose 18 percent in North America, Nike's biggest market, with footwear sales up 11 percent to nearly three billion U.S. dollars.
Revenues dipped one percent to 10.6 billion U.S. dollars. The company scored revenue increases in key markets like China and Europe, but North American sales declined modestly.
Tuesday's results are a far cry from those of just a quarter ago, when Nike suffered a surprise loss following a 38 percent tumble in year-over-year revenues. The company projects full-year revenues to be up "high single digits to low double digits" compared with last year, said Chief Financial Officer Matt Friend.
(With input from agencies)