Valentyn Ogirenko | Reuters
Nike on Thursday reported quarterly earnings and sales that beat analysts expectations, as more customers flocked to its stores for limited-edition Jordan sneakers and ordered athletic apparel from its website.
But the retailer’s shares fell more than 2% in after-hours trading on the news, having hit an all-time intraday high earlier in the day. Nike’s growth on its home turf in North America came in slightly weaker than expected.
Here’s how Nike performed during the latest quarter compared with what analysts were expecting, based on Refinitiv data:
- Earnings per share: 70 cents vs. 58 cents expected
- Revenue: $10.33 billion vs. $10.09 billion expected
“I’ve never been more optimistic about the future of this company,” CEO Mark Parker said in a statement.
Net income rose to $1.12 billion, or 70 cents a share, in the second quarter ended Nov. 30, from $847 million, or 52 cents per share, a year ago. That was better than the 58 cents analysts were expecting, based on Refinitiv data.
Revenue was up about 10% to $10.33 billion from $9.37 billion a year ago, beating expectations for $10.09 billion. Nike said it saw strength across all geographies.
But sales in North America came up short. They climbed 5.3% during the period, reaching $3.98 billion. Analysts were calling for sales of $4 billion.
Nike in October abruptly announced that Parker will be stepping down in January. He will be replaced in 2020 by John Donahoe, a current Nike board member and formerly the CEO of eBay. Parker, meantime, is set to become Nike’s executive chairman, having worked at Nike for four decades.
Parker explained to CNBC at the time that Donahoe will be able to help Nike focus more on digital growth, considering his professional background.
Nike has been investing more recently in boosting its online operations, which include its mobile apps like SNKRS, and driving sales at Nike stores. It has been narrowing its base of wholesale partners and focusing on key accounts, like with Foot Locker, Nordstrom and Dick’s Sporting Goods. Nike in November said it was no longer going to sell clothes and shoes directly to Amazon — an initiative it had been testing since 2017.
Meanwhile, a damning op-ed in The New York Times in November called attention to alleged abuse toward women that took place at Nike’s Oregon Project under track coach Alberto Salazar. The team was previously considered to be the best in the world.
Nike said last month that it takes “the allegations extremely seriously” and that it was launching “an immediate investigation to hear from former Oregon Project athletes.”
However, the fallout has extended even to Nike’s own staff. Hundreds of Nike employees marched in protest of the company’s treatment of women at its headquarters earlier this month.
Nike shares, as of Thursday’s market close, are up more than 36% this year. The company is valued at roughly $157.9 billion. The stock on Thursday hit an all-time intraday high of $101.27.