Nike shares hit a record high after the company reported an 82% jump in online sales
- Nike’s digital sales skyrocketed 82% during the previous quarter, compared to the same period in 2019, it said Tuesday.
- Online sales more than doubled in Europe, the Middle East, and Africa. Sales have recovered to pre-pandemic levels in these regions, it said.
- CEO John Donahoe said that “the accelerated consumer shift toward digital is here to stay.”
- Overall, Nike sold less clothing and equipment than in the same quarter for 2019, but footwear sales rose by 4%.
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Nike's CEO said that online sales were the "new normal," after the brand's digital sales skyrocketed 82% over the last quarter.
Online sales more than doubled in Europe, the Middle East, and Africa, the company said on Tuesday. Sales recovered to pre-pandemic levels in those regions, its financial statements show.
"We know digital is the new normal," CEO John Donahoe said during an earnings call. "The accelerated consumer shift toward digital is here to stay.
Despite the rise in online sales, revenue for its wholesale business and Nike-owned stores fell during lockdown. Nike, which sells clothing, footwear, and sports equipment, said fewer shoppers visited physical stores during the pandemic, even though nearly all of its stores were open during the last quarter.
Its total revenue for the three months to August 31 fell by 1% compared to last year, to $10 billion — though this is up from $6.0 billion during the previous quarter.
Overall, 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. But these figures were all a significant improvement on the quarter to May 31, when sales plummeted 35% for footwear, 42% for clothing, and 53% for equipment, compared to the same period in 2019.
The results exceeded analysts' expectations, and Nike shares jumped 13% to a new record-high in late trading on Tuesday.
Sales triple in Europe
Nike's sales in Europe, the Middle East, and Africa showed a strong rebound, with sales more than tripling from the previous quarter. Sales in the quarter were 5% higher than the same period in 2019.
Revenue hasn't yet recovered in Asia Pacific and Latin America: It was 18% lower than the same period last year, driven by steep declines across all product categories. Around 10% of Nike stores there remained closed, the company added.
Sales for its footwear brand Converse rose by 1% to $563 million because of strong demand in Europe and higher global digital sales, it said.
Nike Inc.'s net income rose by 11% compared to the last quarter, to $1.52 billion. Lower spending on selling and administration, which fell by 11%, more than offset the company's lower gross margin and revenue, it said.
Nike Inc.'s gross profit across both Nike and Converse fell by 0.9%. This is because it introduced higher promotions to reduce excess inventory, and incurred higher supply chain costs, the company said.
Its fast recovery is based on "accelerating brand momentum and digital growth," said Matt Friend, executive vice-president and chief financial officer at Nike Inc. "We continue to drive investment in capabilities that will fuel our consumer-led digital transformation, catalyzing long-term growth and profitability for Nike."
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