Nike reported better-than-expected quarterly results as strong digital sales drove the company’s rebound from the coronavirus pandemic.
For the first quarter, Nike reported net income of $1.52 billion, or 95 cents per share, from $1.37 billion, or 86 cents per share, as revenue fell 0.6% to $10.59 billion. Analysts had expected earnings of 47 cents per share on $9.15 billion.
The footwear giant continued to experience declines in traffic at its physical stores due to COVID-19 impacts and safety-related measures but digital sales increased 82%, reaching the threshold of at least 30% of total quarterly sales that Nike had previously aimed to hit by 2023.
“We know that digital is the new normal. The consumer today is digitally grounded and simply will not revert back,” CEO John Donahoe said during an earnings conference call.
Nike shares jumped 13.1% to $132.15 in extended trading Tuesday as the company also offered a fresh outlook for fiscal 2021, predicting sales will be up high single digits to low double digits from a year earlier.
“Nike is recovering faster [from the pandemic] based on accelerating brand momentum and digital growth,” CFO Matt Friend said.
As CNBC reports, the first-quarter results are a “strong reversal” for Nike after it reported an unexpected loss in the previous quarter as revenue tumbled 38% year over year, reflecting the temporary closure of stores during the pandemic.
Athletic apparel makers have reported strong demand for their clothing and more casual attire as more people work and exercise at home and Nike has invested in its website and apps as it has continued its shift from selling through third-party retailers.
Friend told analysts that demand on the Nike app jumped 150% during the first quarter while Donahoe said there was triple-digit growth in mobile active users on the company’s e-commerce apps, as well as strong demand for Nike’s Run app, which provides digital workouts.
“Our results this quarter continue to demonstrate NIKE’s full competitive advantage, as we strengthen our position in the midst of disruption,” Donahoe said in a news release.
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