- Nike jumped as much as 12% on Wednesday after the sportswear giant trounced expectations for fiscal first-quarter earnings and sales.
- Revenue of $10.59 billion beat the $9.11 billion estimate. Earnings per share reached 95 cents, more than twice the 46 cent expectation.
- Much of the gains were fueled by 82% growth in online sales. The surge accelerates Nike’s plans to boost its online retail operations.
- The company also issued fiscal 2021 guidance of high single-digit to low double-digit revenue growth from the year-ago period. The forecast comes as many retail giants refrain from projecting performance due to 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 physical retail locations, though the quarter did see nearly all stores reopen 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: 95 cents, versus the 46 cents 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 to fiscal 2020.
The forecast arrives as most firms refrain from issuing such projections. Though Nike’s supply chain is still healing, “stronger-than-anticipated demand” will lift sales and drive “significantly” greater growth in the second half, Friend said.
The fiscal first-quarter metrics mark a sharp rebound from Nike’s previous earnings report. The company reported an unexpected quarterly loss of $790 million after the pandemic roiled in-store sales and prompted an inventory glut from shuttered outlets.
Nike closed at $116.87 per share on Tuesday, up 16% year-to-date.
Now read more markets coverage from Markets Insider and Business Insider: