[Overseas Stocks Spotlight] "Nike's Performance Driven by Digital Sales... Expecting Vaccine Effects in 2021"

[Asia Economy Reporter Eunmo Koo] Nike (Nike·NKE.US) announced better-than-expected results as digital sales increased despite the resurgence of COVID-19 in North America and Europe. It is evaluated as a highly attractive company for investment, as additional sales growth is expected next year due to diversification of marketing channels and normalization of offline store operations.

Nike's fiscal year 2021 second quarter (September-November 2020) performance was driven by online sales. Nike's Q2 revenue was $11.24 billion, up 8.9% from the same period last year, and net profit increased by 12.2% to $1.25 billion. Earnings per share (EPS) also rose 11.4% to $0.78. These figures all exceeded market expectations of $10.56 billion, $1 billion, and $0.62, respectively.

In Q2, D2C (direct-to-consumer) sales increased by 32% year-on-year to $4.3 billion, and digital sales surged 84%, driving overall revenue. By region, sales in North America, Europe and Middle East & Africa, Greater China, and Asia Pacific & Latin America increased by 0.6%, 16.6%, 24.4%, and 0.2%, respectively, compared to the same period last year.

2021 is expected to see recovery in offline stores and growth in digital sales. On the 25th, Bo-won Choi, a researcher at Hanwha Investment & Securities, said in a report, “Nike is seeing an increase in users of NKE Digital and NKE Direct, and new membership (Nike Membership) inflow has accelerated since the spread of COVID-19. Additionally, Nike is diversifying sales channels such as applications and live streaming, and plans to expand streaming service areas to Japan following North America and Europe and Middle East & Africa, so additional sales growth is expected.”

He also forecasted, “In the long term, normalization of offline sales, annual dividend increases, and the possibility of resuming share buybacks will have a positive effect.” Although the 12-month forward price-to-earnings ratio (PER) stands at 40 times, it is relatively low compared to Lululemon (55 times) and Puma (48 times).

This content was produced with the assistance of AI translation services.