Nike reported quarterly sales that topped analysts’ expectations, thanks to a boost from its digital business and growth in North America, which helped to offset weakness in China due to COVID-19.
Its shares shot up more than 8% in after-hours trading Tuesday following the release.
Chief Executive Officer John Donahoe said the business is starting to see a “recovery” in China, where the coronavirus originated, following a period of store closures. During the fiscal third quarter, Nike’s sales dropped 5% in Greater China, following 22 consecutive quarters of double-digit growth.
The company said that at a peak in February, roughly 75% of Nike stores in Greater China were closed, with others open on reduced hours. As of Tuesday, however, nearly 80% of its stores in Greater China are open, Nike said. And it added that digital sales in China are approaching triple-digit growth.
“We now have a playbook that we can use elsewhere,” Donahoe told analysts.
He said Nike took what it learned from China and deployed a similar strategy in Japan and South Korea. He said the company will now do the same in the U.S. and across Europe.
Based on learnings from China, the company said it expects its impacted businesses to travel through three phases. First, a recovery period, where stores open back up. Second, a period when supply and consumer demand return to normal levels. And third and finally, a period of getting back to sales growth.
The Portland, Oregon-based sneaker giant
Lost your password?