Nike appears to have recovered from its pandemic slump, posting a solid quarterly profit driven by soaring online sales of its sneakers and workout apparel.
The world’s largest sports apparel maker on Tuesday reported a net profit of $1.5 billion profit, or 95 cents per share, in the three-month period ending Aug. 31, up 11% from the same 2019 quarter.
That was well ahead of Wall Street analysts’ expectations of 47 cents a share, according to FactSet. Nike’s stock surged 13% in after-hours trading following the release of the results.
In previous quarter that ended May 31, the Beaverton, Oregon-based company reported an unexpected loss, with its revenue falling 38% after digital sales failed to make up for losses in physical stores shuttered to combat the spread of the coronavirus.
But analysts had predicted a rebound because Nike has been popular with online shoppers.
In the latest quarter, Nike’s digital sales rose 82%, helping offset declines in its wholesale business and Nike-owned stores.
Revenue in the fiscal first quarter held steady at $10.6 billion, a 1% decline from the previous year. Sales in China rose 6% while North America sales fell 2%.
Analysts had expected revenue of $9.2 billion.
Most of Nike’s stores are now open worldwide but sales continue to be slow because of lower customer traffic and safety measures related to COVID-19, the company said. Shipping costs and promotions aimed at reducing inventory continued to eat at margins but order cancellations fell.
Nike has stepped up its direct-to-consumer online strategy amid the pandemic, leveraging its workout app to drive digital sales. Online sales now make up at least 30% of its revenue, a goal the company had set for 2023.