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Through a store window, a Nike employee stands at the entrance to a Nike SoHo store in New York City. Drew Angerer / Getty Images
Nike stock was rising after the company reported better-than-expected earnings and details the financial impact of the provinces in China.
The sports apparel and accessories company (stock ticker: NKE) reported earnings of 93 cents per share on sales of $12.3 billion for the fiscal fourth quarter ended May 31. That beat earnings estimates of 51 cents per share on revenue of $11 billion.
In a statement to investors, CEO John Donahoe attributed the company’s strong results to its direct-to-consumer acceleration strategy — NIKE Direct sales rose 73% to $4.5 billion during the fourth quarter. Also wholesale shipments were higher.
Driven by 147% year-over-year digital sales growth, currency-adjusted revenue increased 88% year-over-year, confirming that demand for athletic apparel and health care products remains strong even as people return to the office.
North America, which accounts for 32% of Nike’s revenue, remained the strongest region, with annual growth of 141%. Europe, Middle East and Africa overtook Greater China to become Nike’s second largest market after increasing sales year-over-year by 124%.
Sales in Greater China increased 17% compared to the corresponding period last year, as consumer boycotts – in response to the company’s decision to vet its supply chain for the use of forced labor by Uyghurs and other ethnic minorities – appeared to demand its goods.
The Greater China region was Nike’s slowest-growing market during the quarter, trailing nearly triple-digit annual growth in every other region. In previous years, sales growth in China has been consistently twice the rate of Nike globally.
For the full year, sales in Greater China increased by 24%, while global sales increased by 19%.
Nike shares rose 11.9 percent to $149.50 after hours. The S&P 500 closed 0.6% higher.
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