Nike shares soar 13% as online sales jump 82% and rebound in China.
Nike’s earnings crushed estimates as digital sales jumped 82% and sales in China rose 6%, it said, while revenue in North America, Nike’s largest market, was down 2%, however, the North American sales of $4.23 billion were still ahead of analysts’ predictions for $3.39 billion as demand are grow amid the next holiday season.
According to CNBC, the company has used the pandemic as an opportunity to accelerate its digital business, and its women’s apparel division grew nearly 200%. As parents stocked up on back-to-school items, and its business picked back up in key markets like China, Nike said its Jordan brand is looking “stronger than ever.” The biggest sneaker-maker in the U.S. has been investing in its website, mobile apps and owned stores, as more consumers are steering clear of department stores and shopping malls. Nike shares as of Tuesday’s market close are up about 15% year to date. The company has a market cap of $182.5 billion.
Business Insider adds that Nike’s total quarterly clothing sales fell 8% from last year, and its equipment sales dropped by 17%. The only product category to see an overall rise was footwear, with a 4% increase in revenue. These figures were all a significant improvement from the quarter that ended on May 31, when sales plummeted by 35% for footwear, 42% for clothing, and 53% for equipment compared with the same period in 2019.
“We know that digital is the new normal. The consumer today is digitally grounded and simply will not revert back,” CEO John Donahoe said during an earnings conference call. “Nike is recovering faster based on accelerating brand momentum and digital growth,” said CFO Matt Friend.