NKE Nike Inc

By Khadeeja Safdar 

Nike Inc.'s sales rebounded in the summer quarter after slumping earlier during the coronavirus pandemic, as rising digital sales offset declining revenue at traditional stores.

The sportswear company said revenue was $10.6 billion in the quarter ended Aug. 31, down 1% from a year earlier. Digital sales increased 82%.

The latest results showed an improvement from the spring quarter, when the sneaker giant's revenue plunged 38% amid store closures. Nike's shares rose 9% in late trading as the results were better than Wall Street had expected.

Nike said nearly all its owned stores were open during the quarter, but the company continued to experience declines in traffic due to the pandemic and safety-related measures.

The coronavirus prompted Nike and other retailers to close their stores, governments to limit travel and many shoppers to stay home. Though most U.S. states are gradually easing lockdown measures, there have been flare-ups of new cases that have interrupted reopening plans in parts of the country.

Nike said it spent less on marketing because of postponed or canceled sporting events. That translated into higher profits, even though gross margins declined.

For the fiscal first quarter, net income was $1.52 billion, or 95 cents per share. That was nearly twice as much as Wall Street analysts had projected, according to FactSet.

The company also continued to shift more attention to its own stores, website and apps. Direct sales made up $3.7 billion of revenue in the quarter, up 12% from last year.

Over the summer, Chief Executive John Donahoe told employees there would be layoffs this year but didn't specify how many. A Nike spokesman at the time said the reorganization wasn't due to the pandemic, but intended to improve the company's agility.

Write to Khadeeja Safdar at khadeeja.safdar@wsj.com

(END) Dow Jones Newswires

September 22, 2020 17:41 ET (21:41 GMT)

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