Shares of sportswear retailer Nike jumped nearly 10% on Wednesday, a day after the company reported financial results that crushed expectations thanks to the boom in online business during the coronavirus pandemic.
Even though many of its stores have reopened, Nike saw its digital sales jump 82% in the last quarter, as a record number of customers turned to its website and app to buy sneakers and clothes. training.
The company reported revenue of $10.6 billion, smashing analysts’ expectations of just $9.15 billion, with earnings of 95 cents per share (vs. 47 cents expected).
Nike said sales were boosted by parents stocking up on back-to-school items, while its women’s clothing division grew nearly 200% and business also picked up in key markets like the China.
Nike, which has already shifted more of its business to digital, has sharply accelerated that process during the pandemic, shrinking department stores and other outlets in favor of regional pickup centers for online orders.
Before the coronavirus crisis hit, Nike aimed for its online sales to reach 30% of total revenue by 2023, but the company has already surpassed that, now on track to break 50% in the years to come.
Nike’s stock is up nearly 15% so far in 2020, currently trading at around $127 per share, and the company has a market capitalization of around $180 billion.
“Consumers’ accelerated transition to digital is here to stay,” Nike CEO John Donahoe said in the company’s statement. Press release. “Digital is powering how we create the future of retail.” He added that Nike’s digital transformation strategy is “not easily replicable” and that “simply put, scale matters and Nike leads.”
“We know that digital is the new normal. Today’s consumer is digitally entrenched and simply won’t turn back,” Donahoe said. noted when calling the company’s results. Nike and its peers are benefiting from the accelerated shift to e-commerce, along with many other sports brands and retailers including Lululemon, Dick’s Sporting Goods and Peloton. report optimistic results these last weeks. Lululemon, for example, has also seen its digital business take off, with online sales up 157% in the last quarter.
Nike’s latest results mark a sharp rebound from its previous earnings report a quarter earlier. At the end of June, hurt by the temporary closure of stores during the pandemic, Nike published a unexpected loss of $790 million– with revenues down 38% from the previous year. Looking ahead, Nike has issued an optimistic outlook for the remainder of fiscal year 2021, at a time when many of its rivals are avoiding forecasts altogether. Nike expects sales to hit high numbers next year, with demand picking up in the second half of 2021.
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