Nike’s online sales boomed in the second quarter, increasing by 82% compared to the year before. The Wall Street Journal’s Khadeeja Safdar reports:
Nike Inc.’s sales rebounded in the summer quarter after slumping earlier during the coronavirus pandemic, as rising digital sales offset declining revenue at traditional stores.
On Tuesday, the sportswear company said revenue was $10.6 billion in the quarter ended Aug. 31, down 1% from the prior year. Digital sales increased 82%.
“These are times when the strong can get stronger,” Chief Executive John Donahoe said on a conference call with analysts. During the pandemic, he said the company gained market share across the Nike and Jordan brands and returned to growth in international markets, including China and Europe.
The latest results showed a turnaround from the spring quarter, when the sneaker giant’s revenue plunged 38% amid store closures. Nike’s shares rose 9% in late trading as the results were better than Wall Street had expected. The stock was trading near all-time highs.
Nike said nearly all its owned stores were open during the quarter, but the company continued to experience declines in traffic due to the pandemic and safety-related measures.
The coronavirus prompted Nike and other retailers to close their stores, governments to limit travel and many shoppers to stay home. Though most U.S. states are gradually easing lockdown measures, there have been flare-ups of new cases that have interrupted reopening plans in parts of the country.
The virus also prompted most professional and youth sports to be temporarily suspended. However, many leagues have now resumed playing. The National Basketball Association is wrapping up its playoffs from a bubble in Florida, and the National Football League kicked off its season earlier this month. Nike has sponsorships with both leagues.
Nike said it spent less on marketing because of postponed or canceled sporting events. That translated into higher profits, even though gross margins declined.
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