Shares of athletic apparel retailer Nike surged by nearly 10% on Wednesday, a day after the company reported financial results that crushed expectations thanks to booming online business during the coronavirus pandemic.
Even as many of its stores were reopened, Nike saw digital sales jump 82% last quarter, as record numbers of customers turned to its website and app to shop for sneakers and workout apparel.
The company reported revenue of $10.6 billion, crushing analyst expectations of only $9.15 billion, with earnings of 95 cents per share (versus 47 cents expected).
Nike said sales got a boost from parents stocking up on back-to-school items, while its women’s apparel division grew nearly 200% and business also picked back up in key markets like China.
Nike, which has already been shifting more of its business to digital, sharply accelerated that process during the pandemic, cutting back on department stores and other outlets in favor of regional pickup hubs for online orders.
Before the coronavirus crisis hit, Nike was aiming to have its e-commerce sales make up 30% of total revenue by 2023, but the company has already surpassed that, now on track to break 50% in coming years.
Nike’s stock is up almost 15% so far in 2020, currently trading for around $127 per share, and the company has a market capitalization of around $180 billion.
“The accelerated consumer shift toward digital is here to stay,” Nike CEO John Donahoe said in the company’s press release. “Digital is fueling how we create the future of retail.” He added that Nike’s digital transformation strategy is “not easily replicated,” and that “simply put, scale matters, and Nike leads.”
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“We know that digital is the new normal. The consumer today is digitally grounded and simply will not revert back,” Donahoe said during the company’s earnings call. Nike and its peers are benefitting from the accelerated switch to e-commerce, with many other athletic brands and retailers—including Lululemon, Dick’s Sporting Goods and Peloton—also reporting upbeat results in recent weeks. Lululemon, for instance, has also seen its digital business take off, with online sales surging 157% in the latest quarter.
Nike’s latest results mark a sharp rebound from its previous earnings report a quarter earlier. At the end of June, hurt by the temporary closure of stores during the pandemic, Nike posted an unexpected loss of $790 million—with revenue falling 38% from the year before. Looking ahead, Nike issued optimistic guidance for the rest of fiscal year in 2021, at a time when many of its rivals are avoiding forecasts altogether. Nike expects sales to rise to high single digits next year, with demand picking up in the second half of 2021.