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Nike has reported its quarterly earnings and sales that managed to beat previously announced analysts’ expectations.
Footwear maker Nike’s quarterly earnings have risen by 35%. Fans of the limited edition Jordans brands have been going to the stores and have even ordered clothing online. According to the earnings release, the footwear maker indicated that the Jordan brand just hit its first billion dollars in one quarter buoyed by innovation in designs and increased attention given by the shoppers to the basketball-related activities in niche markets that include international sales and women’s basketball specifically.
The markets appeared to remain unmoved in off-hours trading falling two percent. Shares had initially reached an all-time-high but fell indicating investors’ concerns over a weakened sale in North America. Analysts before then hadn’t expected Jordans to lead the pack in terms of sales. This has also indicated that Nike is set to break records while at the same time maintain an international presence.
Based on recent reports this is how Nike’s quarterly earnings looked like.
Earnings per share: 70 cents vs. 58 cents expected
Revenue: $10.33 billion vs. $10.09 billion expected
This, of course, shows that Nike’s earnings totally beat analysts’ expectations and also that the management has gotten it right when it comes to positioning for profit, at least for now.
Mark Parker who is the outgoing CEO and incoming chairman indicated his happiness in a statement when he said:
“I’ve never been more optimistic about the future of this company.”
Sources further indicate that in the North American market, sales distribution appeared to be evenly spread out indicating mass appeal for Nike as a brand. Nike also indicated that online sales went up by 38%. Holiday sales came through for the footwear maker. Online sales on Black Friday alone came up to 70%.
Nike’s Quarterly Earnings Fall Short in North America
North American sales, however, fell short of the analysts’ expectations of $4 billion reaching $3.98 billion. Gross margins also rose to 44%. This is below the predicted 44.1%. In what has been seen by many as a strategy in the right direction Nike suddenly announced the stepdown of its CEO Mark Parker and the hiring of John Donahue who also has a seat on the board and is an ex-CEO of eBay.
The strategy seemed to have worked. Nike for some time now had been looking for a way to improve its online sales. The company had also been making significant investments in its online retailing model which includes everything from mobile apps to major wholesales distribution via selected partners.
This, of course, coincides with its recent decision to part ways with Amazon as per the listing of Nike products on Amazon’s site. How Donahue intends to take the company into the next decade remains unclear but one thing is certain: online retailing is going to be a core component of that and Nike’s quarterly earnings indicate this as well.