Nike cheers return of pro sports as earnings top expectations

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Photo from Nike FB page

By: Inquirer.net

Nike shares rocketed higher recently after the company reported blowout quarterly earnings on strong digital sales and its CEO cheered the return of pro sports.

The sports giant, which suffered bruising losses in the prior quarter due to the coronavirus pandemic, notched an 82 percent increase in digital sales in the quarter ending August 31, offsetting lower revenue in its wholesale business and declines in retail stores, where traffic is still down due to Covid-19.

The company experienced big increases among consumers working out on the Nike Training app, while the “Nike Running Club” app has been downloaded more than million times in each of the last four months, said Chief Executive John Donahoe.

Net income for Nike’s first quarter in fiscal year 2021 was $1.5 billion, up 11 percent from the year-ago period.

Revenues dipped one percent to $10.6 billion. The company scored revenue increases in Greater China and Europe/Middle East/Africa, but North American sales declined modestly.

The results were a big improvement from the prior quarter, when Nike suffered a surprise loss following a 38 percent tumble in year-over-year revenues.

Nike has invested heavily in smartphone applications and other direct-to-consumer initiatives at the expense of conventional retailers following the surge in e-commerce, a trend that has accelerated with the coronavirus.

 

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