By Yasin Ebrahim
Investing.com - Nike (NYSE:NKE) reported on Tuesday first-quarter blowout earnings that topped expectations as efforts to ramp up its direct to consumer boosted performance.
Nike shares gained more than 8% in after-hours trade following the report.
Nike announced earnings per share of 95 cents on revenue of $10.59 billion. Analysts polled by Investing.com anticipated EPS of 44 cents on revenue of $8.89 billion.
Direct sales were $3.7 billion, up 12% on a reported basis with growth across all geographies, the company said.
Nike shares are up 15% from the beginning of the year, still down 2.90% from its 52 week high of $120.47 set on September 15. They are outperforming the S&P 500 which is up 2.63% from the start of the year.
"Our first quarter revenue performance was impacted by strong NIKE Brand digital growth of 82 percent, offset by lower revenue in our wholesale business and NIKE-owned stores," the company said.
North America, the company's biggest market, saw a 2% decline in sales, Greater China revenue increased by 6% on a reported basis, while EMEA returned to growth of 5%, led by triple-digit growth in digital.
But margins fell by 90 basis points to 44.8%, driven by the impacts from COVID-19, including higher promotions to reduce excess inventory across the marketplace and higher supply chain costs, the company said. Inventory rose 15% from the same period a year earlier but decreased 9% from the previous quarter.
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