Tuesday's Market Minute: Nike After Earnings

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Nike reported its third quarter yesterday after the bell, beating estimates on the top and bottom line. The company saw revenue growth in every geographical area except in Greater China, which fell 5%. In bad news for Foot Locker and Dick’s Sporting Goods, Nike also continued to see growth in direct sales, which were up 15% to $4.6 billion, with digital sales up 19% overall and up 33% in North America. Nike’s CFO said, “Marketplace demand continues to significantly exceed available inventory supply.” However, inventories were up 15%, with Nike citing higher in-transit times due to supply chain disruptions.

Historically, Nike has done well through previous crises, according to a Bernstein analyst, who writes that the company gained greater market share through the 2000 dot-com collapse, the 2008-2009 recession, and the pandemic. However, investors should ask whether such strong sales growth will continue, or if demand was pulled forward by COVID restrictions lifting and consumers getting back into the outside world—and if another wave of the virus, like we’re seeing in China, could disrupt it again.

Image sourced from Unsplash

This post contains sponsored advertising content. This content is for informational purposes only and not intended to be investing advice.