Nike
The company also issued a forecast for the next quarter and the full year that was above expectations. Wholesale revenue is also returning to normal as retail foot traffic comes back. It also noted a strong increase in sales in multiple categories. Based on this open, Nike is about 3% above its previous high of $145 set earlier this year.
Inside the Numbers
In its fiscal fourth quarter, Nike reported earnings per share of $0.93, topping analysts expectations of $0.51 per share. Last year in the same quarter, Nike lost $0.51 per share due to the coronavirus leading a plunge in sales as many retail locations were shuttered. Revenue also came in at $12.3 billion, beating consensus expectations of $11 billion. This was also nearly double last year's $6.3 billion in revenue.
North American sales more than doubled to a record $5.4 billion. Sales were 29% higher compared to 2019's fiscal Q4. A big contributor to these results was digital sales which were up 41% compared to last year and 147% compared to 2019.
Digital sales are increasingly seen as the company's future as these sales tend to come with higher margins, more customer loyalty, and higher average ticket price as well. Currently, the company has 300 million members globally who accounted for $3 billion in revenue in the last quarter.
One concern was that Chinese sales only increased by 17% to $1.9 billion. Some analysts cited pushback from Chinese authorities and members of the public after Nike expressed concern about allegations of forced labor in Xinjiang.
For its next fiscal year, Nike expects revenue to exceed $50 billion which is higher than expectations of $48.5 billion. It also anticipates faster growth in the next two quarters as the business normalizes.
Stock Price Outlook
It's hard to find anything bearish about Nike's earnings report. The only two items that could qualify are flagging Chinese sales and potential supply chain disruptions due to shipping and trucking issues which have led to delays in getting items from factories to homes and stores.
In terms of the stock, it seems ready to resume its leadership role. It continues to be one of the most popular brands and is finding new avenues for growth and to increase margins. The strong outlook for growth and consumer spending should continue to support its stock price in the coming months.
