Nike has posted a surge in profits and record sales as shops reopened and coronavirus restrictions around the world eased.
Net income rose to $5.7bn (£4.1bn) for the year ending 31 May, 2021. The sports giant also reported a particularly strong fourth quarter as net income rose to $1.5bn (£1.1bn) compared to a $790m loss the year before.
The brand also reported revenues of $12.3bn (£8.9bn) for the fourth quarter, up 96% compared to the year before. Overall, revenues increased by 19% to $44.5bn (£32.0bn).
Sales of the Nike brand rose 17% to $42.3bn (£30.4bn) with sportswear and the Jordan brand experiencing increased demand.
Revenues of the Converse brand for the year ended 31 May 2020 increased by 16% to $2.2bn (£1.9bn). This growth was attributed to double-digit growth in online sales.
Sales in North America surged in the fourth quarter, up 147% compared to same period last year.
Nike reported seven consecutive years of double-digit growth for the brand’s Greater China business. This comes despite the circulation of an older statement from Nike in recent months in Chinese state media. The statement, related to reports of forced labour in Xinjiang, saw the brand express concerns about the situation and drew the ire of Chinese social media users, prompting fears of a backlash.
Gross margin increased 850bps to 45.8%, while operating expenses increased 16% due to increase in wages, technology investments and costs related to Nike Direct, partially offset by lower bad debt expense.
The brand acknowledged higher wholesale shipments led to a reduction in supply chain costs and attributed success to the reopening of stores and return of sporting activities.
The company estimated that 99% of stores in the EMEA region are now open or operating on reduced hours.
Online sales played a vital role despite the easing of restrictions. Nike brand’s digital sales jumped 41% compared to last year, while fourth-quarter online sales were 147% higher than the equivalent period pre-pandemic in 2019.
Following the announcement, Nike shares jumped more than 12%, according to CNBC.
Chief executive John Donahoe said: “Nike’s strong results this quarter and full fiscal year demonstrate Nike’s unique competitive advantage and deep connection with consumers all over the world.”
“FY21 was a pivotal year for Nike as we brought our Consumer Direct Acceleration strategy to life across the marketplace. Fueled by our momentum, we continue to invest in innovation and our digital leadership to set the foundation for Nike’s long-term growth.”
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