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James Li
James Li
Articles (1494)  | Author's Website |

Nike Receives Christmas Boost on Fiscal 2nd-Quarter Earnings Beat

Sports apparel giant reports triple-digit digital sales growth in the US

December 18, 2020 | About:

Shares of Nike Inc. (NYSE:NKE) increased over 4% in afternoon trading on the heels of reporting fiscal second-quarter earnings that smashed revenue and earnings estimates.

For the quarter ending Nov. 30, the Beaverton, Oregon-based sports apparel giant reported revenue of $11.2 billion, topping the Refinitiv estimate of $10.56 billion and up 9% from the prior-year quarter. Earnings of 78 cents per share topped the consensus estimate of 62 cents per share and increased 11% from the prior-year quarter.

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Company accelerates growth in digital sales and Greater China sales

Nike President and CEO John Donahoe said that the company's strong results during a "dynamic environment" underscores the power of "staying on the offense," with compelling innovative products and global brand momentum driving growth. Total revenue increased 7% on a currency-neutral basis despite the Covid-19 pandemic reducing foot traffic in stores around the globe.

Nike Brand digital sales increased 84% year over year, with triple-digit growth in the U.S. and double-digit growth in the European and Asian regions. Donahoe mentioned during the earnings call that that strong growth in digital sales reflected strong momentum in end-to-end digital transformation, highlighted by strong performance in sales during Black Friday.

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Greater China sales increased 24%, driven by strong performance during China's Nov. 11 Singles Day. Donahoe said that Nike was the top-selling brand among sports brands, with 4 million new members.

Stock rises in aftermarket trading

Shares of Nike traded around $143.96 in aftermarket trading, up approximately 4.8% from the closing price of $137.28. Despite this, the stock is significantly overvalued based on its price-to-GF Value of 1.56.

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GuruFocus ranks Nike's profitability 8 out of 10, driven by net margins and returns outperforming over 80% of global competitors, which include Under Armor Inc. (NYSE:UAA) and adidas AG (XTER:ADS).

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Gurus riding Nike's strong profitability include Ken Fisher (Trades, Portfolio), Spiros Segalas (Trades, Portfolio) and Pioneer Investments (Trades, Portfolio).

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Disclosure: No positions.

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About the author:

James Li
I am an editorial researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!

Visit James Li's Website


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