Friday June 25th 2021
US sales are skyrocketing
It’s working again at Nike
The restrictions of the corona pandemic have slowed the Nike business for a long time – but now the countermovement is starting. In the past quarter, sales rose sharply. The recovery is only sluggish in China. There could be political reasons.
The Adidas competitor Nike is profiting strongly from the lifting of the corona restrictions in the USA. Sales in North America shot up 141 percent to just under $ 5.4 billion in the past quarter. The greatest increases were in sportswear. The share rose at times in after-hours trading by around twelve percent.
Worldwide revenues of 12.3 billion dollars (10.3 billion euros) were almost twice as high as a year earlier. Analysts had expected revenues of around eleven billion dollars for the fourth fiscal quarter, which ended at the end of May. At the same time, Nike itself referred to the effect of the Corona crisis, which had a heavy burden on business in the same quarter of the previous year. Compared to the corresponding quarter of 2019, the increase in sales was a significantly less sensational 19 percent.
Earnings per share almost twice as high as expected
Nike earned $ 1.5 billion after a loss of $ 790 million in the same quarter of the previous year, as the US company announced after the US market closed on Thursday. Earnings per share reached 93 US cents, while analysts had assumed around 50 cents.
Nike boss John Donahoe, who once ran the Ebay trading platform, is working to increase direct sales to consumers both through in-house stores and online. That paid off in the pandemic, in which many stores and shopping malls remained closed. In the entire past financial year, direct revenues rose by almost a third. They now make up nearly 38 percent of Nike’s business. Nike has around 300 million registered direct customers, it said.
The development in China is striking. There, sales growth in the past quarter was only 17 percent, drastically lower than in the rest of the world. Nike is among the companies that were attacked on Chinese social media after addressing forced labor in the Xinjiang Autonomous Region. Analysts therefore paid special attention to the China figures. Donahoe emphasized that Nike has a long-term view of the Chinese market and that the brand is popular there.
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