The Beaverton, Ore. athletic footwear, apparel and accessories company announced quarterly earnings after the bell Thursday, improving on top and bottom lines — and exceeding more than $10 billion in sales in a single quarter.
“Our entire Nike team is fueling our current momentum,” Nike’s president and chief executive officer Mark Parker said in his prepared remarks. “Nike has proven again that innovation is our greatest competitive edge, turning athlete insights into breakthrough product and digital services, as we offer more choice to more consumers at an accelerated pace.”
For the three-month period ending Nov. 30, revenues increased 10 percent to $10.3 billion, up from $9.3 billion last year. Meanwhile, profits grew to $1.1 billion, up from $847 million during last year’s second quarter.
The company’s stock, which closed up 0.58 percent to $101.15 a share, teetered back and forth during after-hours trading, suggesting investors are concerned about the momentum. Even so, shares are up nearly 40 percent year-over-year.
Moreover, despite a string of controversies swirling around the brand this year — including claims of a toxic workplace, allegations of Nike coaches weight-shaming female athletes and the departure of Trevor Edwards, president of Nike’s flagship brand — Nike’s growth spurt has been playing out all year. In March, the company made more than $1 billion in profits in a single quarter for the first time.
The company’s strength may lie in its digital transformation. Digital commerce grew 38 percent during the most recent quarter. During last month’s Black Friday weekend, digital sales grew 70 percent in North America. Parker added on the company’s conference call Thursday evening with analysts that Nike’s app and sneaker app are outperforming all other channels. In addition, apparel grew 10 percent last quarter.
But there are even more changes coming. Those include Parker’s announcement in October that he was stepping down from his post in January to make way for John J. Donahoe 2nd. Donahoe, a member of Nike’s board, has extensive experience in e-commerce, including leading eBay Inc. from 2008 to 2015.
“The best time to make a change is from a position of strength,” Parker said on the conference call.
Nike also recently pulled out of its partnership with Amazon, saying it would no longer sell products directly to the e-commerce giant. The original partnership was seen as a way for Nike to curb illegal sellers and counterfeit Nike products on the site. But the method didn’t seem to be working.
A number of factors have contributed to Nike’s success, such as the continued enthusiasm for ath-leisure goods, the current sneaker obsession, product innovation and the company’s increased push toward sustainability. Nike has also tapped into the growing rental market this year with the launch of Nike Adventure Club, Nike’s first subscription-box service. The subscription rental service for kids is expected to help secure the next generation of Nike loyalists.
“The consumer is voting for our brands across our whole portfolio,” Parker said. “The passion for sports and an active lifestyle are thriving around the world.”