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Nike (NYSE:NKE) shares gained 5.02% in postmarket trade following the report.
Nike announced earnings per share of $0.78 on revenue of $10.10 billion. Analysts polled by Investing.com anticipated EPS of $0.61 on revenue of $9.91 billion. That compared with EPS of $0.68 on revenue of $9.61 billion in the same period a year before. Nike had reported EPS of $0.70 on revenue of $10.33 billion in the previous quarter.
The beat on the top line was led growth in Nike Direct, its direct-to-consumer platform, and strong growth across EMEA, APLA and North America, though this was offset by the impact of the Covid-19 pandemic on its business in Greater China, Nike said. Digital sales in Greater China increased more than 30% while brick-and-mortar retail sales were impacted by temporary store closures, it added.
“In the third quarter, on a currency-neutral basis, Greater China revenues were down 4 percent following 22 consecutive quarters of double-digit growth. However, during the first two months of the third quarter, Greater China’s revenue grew strong double digits, offset by the impacts of Covid-19 beginning in late January,” Nike said.
Gross margin fell 80 basis points to 44.3%, driven by the impact from coronavirus spread, including a lower mix of sales in Greater China, its highest margin geography, as well as increased discounts to wholesale partners and higher costs related to a planned slowdown in factory output amid efforts to manage future inventory.
Analysts are expecting Nike to generate earnings per share of $0.53 and revenue of $10.04 billion in the upcoming quarter.
Nike shares are down 28% from the beginning of the year , still down 31.48% from its 52 week high of $105.62 set on January 22. They are under-performing the S&P 500 which is down 24.65% year to date.
Stay up-to-date on all of the upcoming earnings reports by visiting Investing.com’s earnings calendar
