US sportswear company Nike has announced a net income of US$1.52 billion for the first fiscal quarter of 2021, up from the US$1.37 billion year-on-year (YoY).
Despite the mass closures of physical stores worldwide, the US sportswear giant’s revenue for Q1 fell only 0.6 per cent against the same fiscal period last year, totalling US$10.59 billion.
Nike’s inventory rose 15 per cent versus the previous year but decreased nine per cent compared to the previous quarter.
Nike’s digital sales soared by 82 per cent, with double-digit increases across North America, Greater China and Asia-Pacific and Latin American (APLA) countries, and triple-digit growth in the EMEA region.
John Donahoe, president and chief executive of Nike, said: “We know that digital is the new normal. The consumer today is digitally grounded and simply will not revert back.”
Since Covid-19 struck, Nike has placed considerable emphasis on its direct-to-consumer (DTC) sales, particularly through its own website and apps in a bid to maintain earnings amid Covid-19 restrictions. Despite the majority of its stores reopening, Nike continues to see a YoY decline in overall physical retail traffic.
Sales in China for the period also grew six per cent. North America sales dropped two per cent during Q1 to US$4.23 billion, but were still ahead of analysts’ predictions of US$3.39 billion.
Nike noted that “nearly all” of its physical stores were open during the quarter across North America, EMEA and Greater China, with approximately 90 per cent of doors open in APLA. Despite this, Nike experienced year-on-year declines in physical retail traffic due to Covid-19 impacts and safety-related measures.
Nike reported five-per-cent growth in the EMEA region, with revenues in Greater China increasing by six per cent on a reported basis.
Donahoe added: “Our results this quarter continue to demonstrate Nike’s full competitive advantage, as we strengthen our position in the midst of disruption. 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.”
Following the results, Nike shares rose 13 per cent and were expected to open today at around $132, an all-time high for the company.