Nike says its sales and profits recovered faster than expected in the third quarter and offered a bullish outlook for the coming months despite store closures prompted by a second wave of Covid-19 infections.
The world’s largest maker of athletic gear estimated sales growth in the low teens percentage points for its fiscal 2021, which concludes in May, citing dramatic increases in online shopping, the strength of demand for its products and a previously announced restructuring that helped Nike rebound from a sales plunge in the spring.
“We are still in a pandemic and we know things won’t be linear until we see the virus is more contained,” Matt Friend, chief financial officer, told analysts on a call on Friday, adding that recent momentum had given Nike “confidence” it would hit its targets.
For the three months ending November, Nike sales returned to growth after two straight periods of declines, rising 9 per cent to $11.2bn, as net income rose 12 per cent to $1.3bn.
Gains were boosted by a 84 per cent growth in online sales globally as well as a 19 per cent rise in sales in greater China, which was “the only marketplace with a continued trajectory in terms of managing the virus”, according to Mr Friend.
Wall Street expected a quarterly profit of $990m on revenues of $10.5bn, according to analysts polled by S&P Capital IQ. Nike shares jumped more than 5 per cent to $144 in after-hours trading on Friday.
In June, John Donahoe, chief executive, announced sweeping changes, restructuring Nike’s organisation away from departments for individual sports like running and basketball, and instead grouping all products by men’s, women’s, and kid’s.
Mr Donahoe said the return to sales growth was evidence of a “permanent shift” towards digital commerce, citing strong online takings on two shopping holidays: Black Friday in the US and Singles Day in China, both of which took place in November.
Mr Donahoe credited employees in the company’s retail stores for handling what he called the “open/close, open/close” dynamic in recent weeks amid rising Covid-19 containment measures. As of Friday, 90 per cent of Nike-owned stores were open worldwide, though that figure stood at 80 per cent in Europe, Mr Friend said.