Strength in North America and Europe and from the Converse brand allowed Nike Inc. to beat earnings expectations for the first quarter and sent shares to all-time highs in after-hours trading.
The company broke out results for the Converse brand for the first time, reporting an 18.2 percent increase in quarterly revenue, to $494 million, and a 36.3 percent leap in operating profit, to $169 million. Nike said it would continue to seek expansion for the brand in the direct-to-consumer channel and, in the words of Nike’s president and chief executive officer Mark Parker, “unlock growth in apparel.”
Net income for the three months ended Aug. 31 was $780 million, or 86 cents a diluted share, 37.6 percent above the year-ago level of $567 million, or 61 cents. Revenues rose 7.7 percent to $6.97 billion from $6.47 billion in the prior-year quarter. Gross margin was lifted 120 basis points to 44.9 percent of sales from 43.7 percent.
On average, analysts expected earnings per share of 78 cents and revenues of $6.96 billion. Additionally, Nike’s closely watched future orders metric came in 8 percent above the year-ago mark, a figure that rose to 10 percent at constant currency. Inventories grew more slowly than sales, profits or future orders, moving up 6.4 percent to $1.05 billion.
Investors voiced their approval with the results, sending shares up $4.16, or 5.9 percent, to $74.50 in post-market trading following the disclosure of the results. They closed the regular trading session at $70.34, up 2.1 percent. The after-hours levels represent the highest for the Beaverton, Ore.-based firm since it completed its initial public offering in 1980.
In addition to the strength at Converse, the results were derived from strong, albeit single-digit, increases in both footwear and apparel, with the former category increasing 7.2 percent to $3.98 billion and the latter up 5.8 percent to $2.02 billion. Led by a 9.2 percent advance in North America, to $1.01 billion in sales, apparel grew in all regions with the exception of Japan, where sales were down 20.9 percent to $53 million while declining a more modest 1 percent at constant currency.
Nike logged mixed results in China, where the company is undergoing what Trevor Edwards, the new president of the Nike brand, called “a strategic reset.” Total revenues declined 0.5 percent, to $574 million, as apparel’s 8.8 percent increase, to $197 million, was insufficient to offset footwear’s 4.5 percent decline, to $341 million. However, operating income rose 3 percent, to $170 million, and advance orders in the market were up the same percentage.
“In our own Nike…doors, comp growth was up over 20 percent,” Edwards said. “The knowledge we’ve gained from these early successes can and will be leveraged across the entire market.” However, he cautioned that “the results in China will not always be linear.”
@chanel and @pharrell dropped what’s being dubbed as the world’s most exclusive sneakers yesterday. The Adidas Originals NMD Hu, which Williams designed in collaboration with Chanel and @adidasoriginals, has a waiting list of over 120K people who pre-registered online at chanelatcolette.fr –– and only 500 pairs are on sale. The singer predicted the resale value of the shoes could reach $40K. Read the full interview on WWD.com. Link in bio. #wwdfashion (📷: Dominique Maître)
@imanshumpert is diving deeper into his creative endeavors and relaunching his clothing line, Post 90s, and is helping to raise money for the hurricane victims in St. Maarten with a jersey he’s designed with his brother. The Cleveland Cavaliers player talked to WWD about kneeling during the national anthem, working with fashion brands and how he wants to be more than an @nba player. Read the interview on WWD.com #wwdfashion (📷: George Chinese)
Not only does #TheProfit return to CNBC tonight, but @marcuslemonis has launched @shopmarcus, a new shopping and lifestyle retail experience in Aspen and Chicago, with more locations to come. The retail stores offer in-store stylists and a variety of contemporary womenswear selections.
“It’s life, I’m going to face it,” @mingxi11 sighed. “I fell, but you know, I think the most important thing is that I get back up. I had the love, the help from my sister — the girl next to me Gizele [Oliveira] — she’s so nice. When I went backstage everybody was trying to comfort me like ‘Oh Ming, it’s OK.’ I’m really, really touched. I think it’s them who gave me the courage to go back on stage for the finale,” Xi told WWD of her fall at the @victoriassecret fashion show. (📷: David Fisher) #wwdfashion #vsfashionshow #victoriassecret
@louisvuitton tapped @therealpeterlindbergh for its latest city-centric photo book, which is part of a series called Fashion Eye. The primarily black and white book captures the spirit of Berlin in 57 images shot between 1989 and 2019. “Berlin is an inspiration for me, more than a city. I mean @millajovovich is simply Berlin!” said Lindbergh. #wwdfashion
“You know, I think audiences expect a certain performance so I have to deliver to them what they’re expecting to a certain degree. But I’m also a different actor and a different person, I have my own spin on the character,” says @noahegalvin of his takeover of the leading role in “Dear Evan Hansen” following the departure of @bensplatt, who originated the role. Read WWD’s interview with the 23-year-old actor on WWD.com #wwdeye (📷: @jilliansollazzo)
For pre-fall 2018, @etro created richly-colored wonderland, using tapestries, textiles and wallpapers from the Eastern world at large. The line featured floral and graphic prints and jacquard motifs, like this two-piece look featured here. #wwdfashion (📷: Giovanna Pavesi)
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
“I just wanted to create this fully rounded character, but I do think what excited me most was just the opportunity to give a group of people representation that I feel needs it. I like to do characters in projects that stand for something and Karolina definitely does, so that was really exciting to me,” @ginnygardner says of her new role in @hulu’s “The Runaways.” Gardner plays Karolina Dean, a queer superhero, which is a rarity for @marvel. Read more about Gardner’s character on WWD.com #wwdeye (📷: @dandoperalski)