Nike Shares Just Hit an All-Time High: Inside the Quarter That Surprised Investors in the Best Possible Way

Leave it to Nike to surprise investors in the best possible way. Shares of the Swoosh hit an all-time high at market open this morning, jumping nearly 11% percent to 129.45.

The spike followed a sales and earnings beat that is almost unheard of: Revenues were $1.5 billion higher than analysts expected. Earnings per share were 95 cents — up 10% from the prior year, compared with forecasts of 47 cents. While it isn’t easy for market watchers to make predictions in today’s climate, one thing is clear: Nike is doing just about everything right.

“Digital prowess, best-in-class customer engagement, and unrivaled product innovation continue to accelerate,” said Susquehanna Financial Group analyst Sam Poser. “Nike’s unmatched brand strength continues to grow during the pandemic. [The company] continues to take share and solidify its position as the most dominant athletic footwear and apparel brand in the world.” Poser noted that president CEO John Donahoe is proving to be the “ideal” executive to lead the company through it’s evolution.

In a conference call, the former eBay chief spelled out three distinct “tailwinds” that are helping Nike accelerate its strategy.

First, Donahoe said, consumers are relying on digital to drive all decisions, and Nike is the center of it all. Take the brand’s “You Can’t Stop the Sport” campaign, which racked up 2.6 billion impressions.

Second, shoppers are thinking of sport in a more holistic way to include health, wellness and fitness — all areas in which Nike is heavily investing in.

Finally, authentic brands are winning right now and Nike dominates in that category too. “Our strength amid these evolving conditions help keep us in the lead. These advantages allow us to stay aggressive,” Donahoe noted.

The athletic giant this summer started the Consumer Direct Acceleration phase as part of its Consumer Direct Offense alignment announced three years ago.

And while many fashion and athletic players scaled back on openings as the pandemic created uncertainty, Nike forged ahead, launching new digital-centric stores in Guangzhou, China; Seoul; Los Angeles; and Paris. Next up, two openings in New York.

At the same time, Nike is also scaling back on wholesale partnerships, namely those that aren’t in sync with its consumer-first strategy.

Donahoe noted in the call that the North American market is the most fragmented and the least developed in terms of seamless digital and physical experiences. “That’s what’s driving our One Nike marketplace, where we lead with digital. We then follow with our Nike Direct where we have very premium experiences that are often digitally infused. And then we work with fewer strategic partners who see the world the same way we see the world — and want to provide this consistent experiences for our consumers,” the CEO said.

The company isn’t waiting for the rest of the market to catch up either. “We’re accelerating what probably would have happened in the retail environment naturally in the next four to five years. We’re going to try to drive it for our business in the next one to two years,” he said.

Access exclusive content