Nike’s (NYSE:NKE) share price jumped more than 10% in pre-market trading Wednesday after the sneaker and apparel maker reported blowout quarterly results.
The Beaverton, Oregon-based company beat analysts’ revenue expectations for its first fiscal quarter by more than $1 billion, signaling the sportswear giant is making a comeback from the COVID-19 pandemic.
The company reported diluted earnings per share of $0.95 for the three months ended August 31. Revenue was $10.6 billion, down 1% year-over-year. Wall Street analysts had projected earnings per share of $0.47 on revenue of $9.14 billion, according to Refinitiv estimates.
Nike stock jumped to $132 a share in pre-market trading on the news. Many footwear and apparel companies, including Nike, were hard hit by store closures and a decline in in-store shopping earlier this year. In the quarter ended May 31, Nike posted a net loss and 38% decline in revenue.
In the latest quarter, however, Nike said that nearly all of its stores had reopened.
Additionally, Nike’s investments in digital sales significantly boosted sales in the latest quarter. In recent years, the company has shifted its focus from selling through third-party retailers to leaning on its own direct-to-consumer sales channels and e-commerce business, which positions it to benefit as more consumers have turned to shopping online.
The company said its “Nike Brand” digital sales grew 82% during the quarter, including triple-digit growth in the Europe, the Middle East and Africa. Overall, revenue has returned to growth in the Europe, Middle East, Africa and China.
Sales in Asia Pacific and Latin America dropped 18%, and North American sales fell just 2% from the same period in the prior year, a significant improvement from the 46% year-over-year decline reported in Nike’s previous quarter.
Nike said it has also benefitted from the return of live sports, which are a key marketing opportunity for the shoe and sportswear giant.