Nike raises full-year sales forecast, posts surprise earnings growth
Nike Inc said on Friday that full-year revenue will likely be better than previously expected, after COVID-wary shoppers demanding outdoor sportswear drove its third consecutive surge in online sales.
Shares in Beaverton, Oregon-based Nike were up about 5% in trading after the bell. They have gained about 37% this year.
The global health crisis has pushed people to take up activities such as running or biking, giving a much needed boost to Nike and other sportswear makers after they took a hit to sales earlier in the year.
Under lockdown, people have also been logging into Nike’s workout and store apps en masse, driving significantly higher online sales all year.
The time Nike has invested in its e-commerce channels has paid off and given it a big competitive edge over rivals like Adidas, said Jessica Ramirez, retail analyst at Jane Hali & Associates.
“Nike’s website is promptly updated and easy to browse, its app is intuitive and its focus on gathering customer data through its various services has really helped it target the right consumers at a time when people are more cautious with their spending.”
The world’s biggest athletic apparel company said it expects annual revenue growth in the “low-teens,” up from its previous forecast of a high single-digit to low double-digit increase.
Nike said digital sales jumped 84%, with triple-digit growth in North America – its biggest market – and strong double-digit increases in other parts of the world.
Revenue rose about 9% to $11.24 billion in the second quarter ended Nov. 30, while analysts on average had expected $10.56 billion, according to IBES data from Refinitiv.
The company reported a 12% increase in profit to $1.25 billion, or 78 cents per share, beating analysts’ expectations of 62 cents per share.
Selling and administrative expenses fell 2% to $3.3 billion, further boosting profit, as the pandemic kept Nike from spending as much on marketing its brands and sports events.