Shares for Nike Inc. are up in the high single digits at market close on Tuesday after the sportswear giant posted better-than-expected earnings and sales.
For the three months ended Aug. 31, the Beaverton, Ore.-based company logged diluted earnings per share of 95 cents — up 10% from the prior year and trouncing analysts’ estimates of earnings of 47 cents per share. Revenues, although down 1%, amounted to $10.6 billion, compared with Wall Street’s forecasts of $9.14 billion.
As of 4:30 p.m. ET, Nike’s stock was up more than 8% to $126.38.
“Our results this quarter continue to demonstrate Nike’s full competitive advantage, as we strengthen our position in the midst of disruption,” president and CEO John Donahoe said in a statement. “In this dynamic environment, no one can match our pace of launching innovative product and our brand’s deep connection to consumers. These strengths, coupled with our digital acceleration, are unlocking Nike’s long-term market potential.”
During the first quarter, the athletic apparel and footwear brand saw an 82% increase in sales via its digital channels, which was offset by lower revenues in its wholesale business and retail stores. Nearly all of its owned physical doors are now open across North America, the Europe-Middle East-Africa regions and Greater China, while roughly 90% of its locations operated in Asia-Pacific and Latin American countries have resumed business.
Revenues for the Nike brand, it shared, were flat at $10 billion. It saw double-digit growth in its Nike Direct business (up 12% to $3.7 billion), as well as gains in its Sportswear and Jordan Brand. At Converse, sales advanced 2% to $563 million.
At the end of the three-month period, Nike had total liquidity of $13.4 billion, including cash and equivalents, plus short-term investments and credit facilities that remained undrawn.
“Nike is recovering faster based on accelerating brand momentum and digital growth, as well as our relentless focus on normalizing marketplace supply and demand,” said EVP and CFO Matt Friend. “We continue to drive investment in capabilities that will fuel our consumer-led digital transformation, catalyzing long-term growth and profitability for Nike.”
Three months ago, in tandem with the release of its fourth-quarter results, Nike announced that it had entered the next phase of its Consumer Direct Offense strategy: Consumer Direct Acceleration, which is focused on increased investments in e-commerce and technology, as well as a more simplified “consumer construct” of men’s, women’s and kids’ businesses. The changes, it reported in late July, would result in the layoffs of 500 or so employees at its corporate headquarters, starting Oct. 1.