Sign up for our free daily newsletter
Get the latest news and some fun stuff
in your inbox every day
Nike had quarterly results out last night after the closing bell, and they were very good. Analysts expected sales for the 3-month period ending on 31 August to be $9.1 billion with earnings per share of 44 cents. Instead, they came in with sales of $10.6 billion and earnings of 95 cents per share.
I made two big online orders of new running shoes in the last three months, in addition to a few visits to the Nike stores in Sandton and Rosebank, so I'm not surprised by the blowout sales. I have a pair of Nike Air Zoom Tempo Next% shoes on their way to me right now (see picture below). Very exciting!
It would seem that a lot of people took up running during the lockdown period. If you can't go to the gym, you'll have to hit the streets? Nike's new management team led by CEO John Donahoe battled to get stock into some stores and was stuck with inventory in others, due to Covid-19 logjams in their production networks and store closures. Those problems are now a thing of the past.
Nike has been forging ahead with its digital, direct-to-consumer strategy. The stores are fine, and open again, but just go online please. Better margins. Nike made headlines a few weeks back when they severed ties with nine wholesale sellers of their shoes. E-commerce sales rose by 82% are now 35% of Nike's total revenue. They breezed past the goal of one third of sales that they had previously set for 2023.
In the earnings statement, new CEO John Donahoe said "in this dynamic environment, no one can match our pace of launching innovative product and our brand's deep connection to consumers. These strengths, coupled with our digital acceleration, are unlocking Nike's long-term market potential."
The company also offered a fresh outlook for its full 2021 financial year, expecting sales to be up high single digits to low double digits from a year earlier. That's much better than most analysts expected. As a result the Nike share price rose by 13% after hours, reaching a new all-time high of $130 a share. How thrilling! Almost all Vestact clients own Nike shares in New York. I'll have to go and have a run now, to calm myself down.
