Nike (NKE) reports superior fourth quarter 2021 result

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Nike on Thursday released fourth-quarter earnings and sales that beat analysts’ estimates, fueled by record revenues in its largest market, North America.

It also offered better-than-expected sales prospects for the coming year, driven by optimism around its women’s category, its clothing business and the Jordan brand.

Nike continues to benefit consumers looking for comfortable clothing to wear for workouts but also at home. Even as people return to school, the office, and other social places, many are still looking for casual options like sneakers and stretchy pants.

Nike has also seen its wholesale business increase – something that was largely inactive a year earlier during the Covid pandemic, when malls and department stores had to temporarily close their doors and put orders for merchandise. on break. Some of Nike’s main wholesale partners include Dick’s Sporting Goods, Foot Locker, and JD Sports.

Nike shares jumped more than 12% in after-hours trading.

Here’s how the company fared in its fiscal fourth quarter, compared to what analysts expected, using Refinitiv’s estimates:

  • Earnings per share: 93 cents vs. 51 cents expected
  • Turnover: $ 12.34 billion against $ 11.01 billion expected

Nike’s net income for the period ended May 31 was $ 1.5 billion, or 93 cents per share, from a loss of $ 790 million, or 51 cents per share, a year earlier. This topped analysts’ expectations of 51 cents per share, using data from Refinitiv.

Total revenue reached $ 12.34 billion from $ 6.31 billion a year earlier, beating estimates of $ 11.01 billion. Sales were made easier by the company selling more products at full price and relying less on markdowns.

In North America, Nike’s largest market, sales more than doubled to a record $ 5.38 billion, as the company jumped from the previous year when the Covid pandemic hit the hardest. hit the retail industry hard. Sales in the region increased 29% over two years.

In Greater China, sales rose only 17% to $ 1.93 billion. Although China is generally one of the fastest growing markets for Nike, Chinese consumers have threatened to boycott after some Western brands, including Nike, expressed concern over allegations of forced labor in Xinjiang.

Management said Thursday that Nike is seeing month-to-month improvement in China.

“Building on our 40-year history in Greater China, we continue to invest in serving consumers with the best products Nike has to offer in locally relevant ways,” CFO Matt Friend said during a conference call after the results.

Digital sales increased 41% year-over-year and 147% year-over-year 2019.

The company said its membership model helps fuel its e-commerce business. Online purchases by Nike members, who enjoy first-time access to exclusive products and other perks, hit a record $ 3 billion in the fourth quarter. Nike said it now has more than 300 million members worldwide.

“Building on our momentum, we continue to invest in innovation and our digital leadership to lay the foundation for Nike’s long-term growth,” said John Donahoe, CEO of Nike.

In fiscal 2022, Nike expects revenue growth to a low double-digit percentage, exceeding $ 50 billion. Analysts were looking for annual revenue of $ 48.5 billion.

The company expects the first half of the year to grow faster than the second, Friend said.

“It’s important to note that as we normalize our post-pandemic business and continue to reshape the market, we don’t expect quarterly growth to be linear,” he said.

Nike also predicts that supply chain delays and higher logistics costs will persist for much of fiscal 2022. Headaches have plagued much of the retail industry for months now. A shortage of containers and a shortage of truck drivers, among other factors, have kept goods from moving from ports to warehouses to buyers’ homes.

Nike shares have fallen more than 5% since the start of the year. The company has a market capitalization of $ 211 billion.

Find the full press release on Nike’s results here.

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