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SNEAKERS & FASHION

Nike Beats Earnings Estimates with Digital Dominance

The Swoosh announced $11.36 billion in revenue in a Q2 earnings call Monday, exceeding expectations by more than $100 million thanks to ecommerce and the metaverse.

Nike modestly exceeded Q2 estimates according to official figures released Monday. The biggest name in sneakers and apparel reported $11.36 billion in revenue, beating a consensus estimate of $11.25 billion from Yahoo and Bloomberg.

Other topline numbers from the Swoosh’s second quarter include:

  • $4.48 billion in North American revenue, a 12% increase year over year that beat estimates of $4.18 billion, offsetting a 20% year-over-year dip in sales in China “largely due to lower levels of available inventory resulting from COVID-19 related factory closures,” per the company’s quarterly report
  • Digital sales were up 12% year over year, including 40% in North America, with a 9% increase in sales from its Nike Direct service to $4.7 billion
  • A 30% increase in its North America Direct product, which reported record Black Friday week sales.

“Nike’s strong results this quarter provide further proof that our strategy is working, as we execute through a dynamic environment,” said Nike president and CEO John Donahoe. “We are now in a much stronger competitive position today than we were 18 months ago. And I want to thank our roughly 75,000 global teammates for all their work to provide consumers with the compelling new product, innovation, and experiences that only Nike can deliver.”

While digital sales continued to rise, revenues have decreased in the company’s wholesale business.

“As we navigate through short-term supply challenges, we are focused on executing our Consumer Direct Acceleration strategy to fuel our long-term financial outlook,” said Matt Friend, Nike’s executive vice president and chief financial officer.

Nike further doubled down on digital in the second quarter by firmly planting its flag in the ever-expanding metaverse.

Last month, it partnered with Roblox to create Nikeland, a virtual campus where consumers can purchase virtual apparel and goods for their digital avatars. And last week it acquired RTFKT, which leverages augmented reality, blockchain, NFTs and other technological advances to create its one-of-a-kind products like virtual sneakers, memes and exclusive collectibles to be used in the metaverse.

The Swoosh also reported strong sales from its Converse brand, with $557 million in revenue up 16% year over year, buoyed by strong performance across the board in Europe and North America.

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