Nike Inc. (NYSE: NKE) released its fiscal third-quarter financial results after the markets closed on Tuesday. The Dow Jones industrial average is coming off its best day since 1933, and while Nike saw an incredible gain on Tuesday, it added even more after earnings.
Nike posted $0.53 in earnings per share (EPS) on $10.1 billion in revenue for the quarter. Analysts expected EPS of $0.60 in and $9.84 billion in revenue for the fiscal third quarter. The same period of last year reportedly had $0.68 per share and $9.61 billion.
Overall, revenues increased 5% on a reported basis and up 7% on a currency-neutral basis, driven by 13% currency-neutral growth in Nike Direct, with digital growth of 36% and strong growth across EMEA, APLA and North America, offset by the impact of COVID-19 on business in Greater China. Digital sales in Greater China increased more than 30%, while brick-and-mortar retail sales were affected by temporary store closures related to COVID-19.
In the third quarter, on a currency-neutral basis, Greater China revenues were down 4%, following 22 consecutive quarters of double-digit growth. However, during the first two months of the third quarter, Greater China’s revenue grew strong double digits, offset by the impacts of COVID-19 beginning in late January.
At the peak in February, roughly 75% of Nike-owned and partner doors in Greater China were closed, with others operating on reduced hours. Currently, nearly 80% of doors are open in Greater China with an even higher rate in key cities. Beginning March 16, all Nike-owned stores, outside of Greater China, Japan and Korea were closed to help curb the spread of COVID-19.
John Donahoe, president and CEO, commented:
In an extraordinarily dynamic time, NIKE’s strong results are testament to our deep consumer connections, compelling product innovation and agile teams around the world. We know it’s in times like these that strong brands get even stronger. As we start to see recovery in China, no one is better equipped than NIKE to navigate the current climate.
Nike stock traded up about 10% at $79.60 Wednesday morning, in a 52-week range of $60.00 to $105.62. The consensus price target is $96.26.
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