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Nike shares rise as on-line gross sales soar 82%. The retailer is seeing a restoration in China

Nike stock gained 13% in expanded trading on Tuesday as the company saw online sales jump 82% and offered an outlook that requires growth in demand over the holidays.

The company used the pandemic as an opportunity to accelerate its digital business, and the womenswear business grew nearly 200%. As parents stocked up on back to school supplies and business picked up again in key markets like China, Nike said the Jordan brand was "stronger than ever".

The company also offered a new outlook for fiscal 2021, expecting revenue to grow in high single to low double digits year over year. The outlook comes at a time when many of its competitors eschew the financial forecast.

"We know digital is the new normal. Consumers are digitally grounded today and just won't return," CEO John Donahoe said during a conference call on the results.

Here's how the company performed compared to analyst expectations based on refinitive data:

Earnings per share: 95 cents versus 47 cents, expected Revenue: $ 10.59 billion versus $ 9.15 billion, expected

For the first quarter ended August 31, net income rose to $ 1.52 billion, or 95 cents per share, from $ 1.37 billion, or 86 cents per share last year. That was far better than the 47 cents per share expected by analysts.

Nike revenue declined 0.6% to $ 10.59 billion from $ 10.66 billion a year ago, but surpassed analysts' forecast $ 9.15 billion.

Sales in China increased 6%, while sales in North America, Nike's largest market, decreased 2%. However, North American sales of $ 4.23 billion were still ahead of analysts' forecasts of $ 3.39 billion.

The latest results are a major reversal for Nike after seeing a major slump last quarter. In late June, Nike reported an unexpected loss as sales fell 38% year-over-year, hurt by the temporary store closings during the pandemic.

However, in the first quarter, Nike announced that most stores had reopened, even though traffic had decreased year over year. Like many other retailers, Nike still limits the number of people who can come into its stores at one time to help contain the spread of the virus. But when people come to visit, they come with the intention of buying, and Nike said conversion rates have increased.

Meanwhile, Nike inventory levels at the end of the most recent period were $ 6.7 billion, up 15% year over year and down 9% quarter over quarter. Nike said it had "continued to strategically manage excess inventory resulting from significant door closings and lower global wholesale deliveries."

The largest sneaker maker in the United States has invested in its website, mobile apps, and its own stores as more consumers avoid department stores and malls. It has opened sprawling flagship locations in key markets as well as smaller stores to serve as pick-up hubs for online orders. His investments help increase its relative strength compared to other retailers hard hit by the pandemic. Dozens, including Brooks Brothers, J.Crew, J.C. Penney and Neiman Marcus, filed for bankruptcy this year.

A number of sports-focused brands and retailers, including Lululemon, Dick & # 39; s Sporting Goods, and Peloton, have also reported positive results in the past few weeks as consumers seek comfortable clothing and exercise equipment during the Covid-19 crisis. Nike and his colleagues have benefited from this trend.

The pandemic is significantly accelerating Nike's digital potential. According to Nike, digital sales now account for at least 30% of total quarterly sales, a threshold Nike previously wanted to reach by 2023.

"Nike is recovering faster because of the acceleration in brand momentum and digital growth," said CFO Matt Friend on Tuesday.

Looking ahead to the first half of fiscal 2021, Friend expects Nike to achieve roughly unchanged sales compared to last year. He said demand should pick up in the second half of the year as consumers return to buying full price items and help Nike meet expectations for the full year.

Nike shares were up about 15% year-to-date at Tuesday's close. The company has a market capitalization of $ 182.5 billion.

You can find the full results release from Nike here.

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