posted record quarterly sales, topping $12 billion for the first time in its 50-year history, on pent-up U.S. consumer demand for sneakers and sportswear this spring.
Revenue in the May ended quarter nearly doubled to $12.34 billion from $6.31 billion a year ago, when sales were depressed by the spread of Covid-19. Nike’s direct sales—those items ordered through its apps, websites or own stores—climbed 73% to $4.5 billion.
Shares jumped 12% in after-hours trading, as the sales and profits were better than Wall Street had forecast. Nike’s net income was $1.5 billion, compared with a net loss of $790 million in the year ago quarter.
“These are times when strong brands can get stronger, and each quarter, this reality becomes even more clear,” said CEO
on a call Thursday with analysts.
During the pandemic, many professional and youth sports were halted. Nike temporarily closed its retail stores and continued to pay its workers, and doubled down on digital sales while consumers were confined to their homes.
As people returned to shopping in stores and sporting events resumed, revenue increased 141% in North America in the May-ended quarter. Sales in the region rose 29% from the same period in 2019. The company said it captured sales from increased wholesale revenue due to delayed shipments from the previous quarter.
Nike also fared better in China than some investors had feared amid calls in the country to boycott global brands for their comments on alleged human rights abuses in Xinjiang. Sales in the Greater China region rose 17% to $1.9 billion in the latest quarter.
Executives said they expect revenue to increase more than 10% and surpass $50 billion in the fiscal year started in June, after rising 19% in the just-ended fiscal year. They also expect profit margins to expand as the company sells more items directly to consumers. The company said it expects direct sales to make up about 60% of total sales in 2025, up from about 40%.
In China, Nike said it expects to deliver low to mid teens growth in the region over the long term. The company also said it is seeing sequential improvement in the country and plans to open a new digital technology center in Shenzhen.
Write to Kimberly Chin at email@example.com
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Appeared in the June 25, 2021, print edition as ‘Nike Swings to Profit, Posts Record Revenue in Quarter.’