Nike Inc (NYSE: NKE) saw shares climb 13% in after-hours trading on Tuesday, hitting a new all-time high, as the company reported a record profit.
Just Do It. Nike clearly practices what it preaches as shares climbed to a record high on first-quarter (for the three months ending 31 August 2020) fiscal 2021 earnings that completely blew away expectations.
Perhaps the best measurement of how Nike surprised consensus was on earnings per share (EPS), which were 95 cents. That was more than double the expectation of 47 cents.
One of the big reasons Nike has been so successful (in an environment you’d expect it to suffer) has been its digital strategy. Early investment into a coherent online roadmap has paid off for the sportswear giant.
The litmus test for it came in the form of the Covid-19 pandemic. So far, it’s looking good for Nike on that front.
Smart distribution moves
The company increased its digital sales by an incredible 82% year-on-year in its latest quarter. Anyone who’s been stuck at home is probably familiar with the “Nike Training Club App” – just one example of how customers can interact with the brand digitally.
Nike has also implemented livestream workouts on its YouTube channel and introduced digital fitness challenges where key ambassadors – such as Lebron James or Cristiano Ronaldo – stream themselves doing their workouts.
It’s all part of the Nike aura and this is one company which has hit the nail on the head with its online strategy.
For long-term investors who want access to a best-in-class consumer name that will continue to thrive in this “new normal”, you can’t go wrong with Nike.
Disclaimer: ProsperUs Head of Content Tim Phillips doesn’t own shares of any companies mentioned.
This material is categorised as non-independent for the purposes of CGS-CIMB Securities (Singapore) Pte. Ltd. and its affiliates (collectively “CGS-CIMB”) and therefore does not provide an impartial or objective assessment of the subject matter and does not constitute independent research. Consequently, this material has not been prepared in accordance with legal requirements designed to promote the independence of research. Therefore, this material is considered a marketing communication.
This material is general in nature and has been prepared for information purposes only. It is intended for circulation amongst CGS-CIMB’s clients generally and does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this material. The information and opinions in this material are not and should not be construed or considered as an offer, recommendation or solicitation to buy or sell the subject securities, derivative contracts, related investments or other financial instruments or any derivative instrument, or any rights pertaining thereto. CGS-CIMB have not, and will not accept any obligation to check or ensure the adequacy, accuracy, completeness, reliability or fairness of any information and opinion contained in this material. CGS-CIMB shall not be liable in any manner whatsoever for any consequences (including but not limited to any direct, indirect or consequential losses, loss of profits and damages) of any reliance thereon or usage thereof.