Pro Content

Nike Presents Exceptional Results Despite COVID

Nike published on September 22nd its quarterly results for FY2021 Q1 (June, July, August 2020). This quarter was still supposed to be heavily impacted by the COVID crisis, as most retailers are still operating at fraction of their capacity. However, vs last year, Nike managed to maintain their revenue ($10.6 billion, flat to prior year on a currency-neutral basis), and strongly increase their profitability: net income rose +11% vs last year.

How did they manage such wizardry?



1/ Digital efforts are paying off. 



Nike has been focusing on growing its digital business capacity for years. As COVID pushed consumers to purchase digitally, Nike was ready to create and meet demand. For the quarter, digital revenues rose 82% globally, triple digit in EMEA (!), offsetting falling wholesale revenues.

Nike has ambitious digital growth plans, yet they are reaching their objectives two years ahead of schedule.



2/ Demand Creation was cut by 33%

Despite investments in digital channels, postponement of major sporting events (Olympics, UEFA European Championship and others) had a significant impact on Nike’s DC expenses. Less costs, better profitability.

Nike is not known for its complacency, so if those results alone were not enough to put pressure on competitors, well… they are actually accelerating their digital transformation with “Consumer Direct Acceleration”, the next digitally empowered phase of their strategy : https://news.nike.com/news/nike-senior-leadership-changes-consumer-direct-acceleration

Finally, for this Q1 2021, Nike rose dividends to shareholders by 11% vs last year.

The Nike stock price reached an all-time high of $130.30 on September 23rd 2020.

COVID environment is complicated for all, but it seems like Nike found its way to navigate through the storm.