NEW YORK (AFP) – Nike reported better-than-expected quarterly earnings Tuesday on big growth in digital sales, lifting shares and bouncing back from a loss in the prior period caused by the coronavirus pandemic.
The sports giant scored an 82 percent increase in digital sales, offsetting lower revenue in its wholesale business and declines in retail stores, where traffic is still down due to Covid-19.
”Nike is recovering faster based on accelerating brand momentum and digital growth, as well as our relentless focus on normalizing marketplace supply and demand,” said Chief Financial Officer Matt Friend.
Net income for the quarter ending August 31 was $1.5 billion, up 11 percent from the year-ago period.
Revenues dipped one percent to $10.6 billion.
The results were a big improvement from the prior quarter, when Nike suffered a surprise loss following a 38 percent tumble in year-over-year revenues.
Nike has invested heavily in smartphone applications and other direct-to-consumer initiatives in the wake of the surge in e-commerce at the expense of conventional retailers, a trend that has accelerated with the coronavirus.
During the quarter, Nike said its profit margins were pinched by higher promotion spending to reduce excess product inventory and higher supply chain costs.
But results benefited from lower marketing spending due to cancelations or postponement of numerous professional sports events.
Shares of Nike jumped 8.5 percent to $126.90 in after-hours trading.
