Jun 29, 2021 (IAM Newswire via COMTEX) -- Last Thursday, Nike /zigman2/quotes/203439053/composite NKE -0.76% reported fiscal fourth-quarter earnings and sales that topped analysts' estimates, fueled by record revenue in its largest market, North America. The sports retailer also provided a better-than-expected sales outlook for the upcoming year, driven by optimism around its women's category, apparel business and Jordan brand. Upon the news, shares jumped more than 12% in after-hours trading.
A new normal is also benefiting Nike
2020 was the year for athleisure wear, with even Nike's competitors such as Lululemon athletica /zigman2/quotes/204011506/composite LULU +0.62% doubling its revenue YoY. But Nike continues to benefit from consumers enthusiastically seeking comfortable clothing to wear for both their workouts and around the house. Even as people are returning to a world with eased social distancing, relaxed options such as sneakers and stretchy pants are the new normal. North America sales more than doubled at $5.38 billion, making a new record.
The iconic sports retailer also enjoyed a great boost of its wholesale business after the segment was brutally harmed by the pandemic related closures of shopping malls and department stores. Dick's Sporting Goods /zigman2/quotes/200566298/composite DKS -1.83% , Foot Locker /zigman2/quotes/204092533/composite FL -2.86% and JD Sports are just some of Nike's key wholesale partners.
Net income for the period ended on May 31 [st] rose to $1.5 billion, resulting in earnings per share of 93 cents that exceeded the 51 cents expected on revenue that amounted to $12.34 billion, also exceeding the expected $11.01 billion. Total revenue rose from $6.31 billion a year earlier as the company sold more goods at full prices and relied less on markdowns. Compared to last year's figure, digital sales were up 41% and 147% compared to the same period in 2019.
China- a potential setback?
In Greater China that is one of the fastest-growing markets, sales were up just 17% at $1.93 billion as consumers threatened the apparel giant with a boycott due to allegations of forced labor in Xinjiang. But management said last week the company is seeing improvement iin the region with every passing month.
In fiscal 2022, Nike is expecting annual revenue to grow a low double-digit percentage, surpassing $50 billion, exceeding analysts' estimate of $48.5 billion. The company anticipates the first half of the year to grow faster than the second half. As for the headaches have been plaguing much of the retail industry for months now, management anticipates supply chain delays and higher logistics costs will persist throughout much of fiscal 2022. A shortage of containers and truck drivers, along with a combination of factors, have stalled merchandise from getting from ports to warehouses and ultimately shoppers' homes.
No one dares to speak a lot about the future these days but at least this time round, Nike smashed its earnings report, showing once again that investing in a mindset to create groundbreaking sport innovations is always a good investment that pays off over the long run.
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