Nike (NKE 2.52%) was battered as a result of the COVID-19 outbreak. The company had to close nearly all its stores at one point, and many of its wholesale partners had to do the same. Meanwhile, many sports leagues suspended or paused their seasons, which removed a critical opportunity for consumers to see Nike's products in action worn by superstars like Lebron James. 

Now, with many places across the globe ending lockdowns, people are venturing out a little more often, and Nike is hoping for a bounceback to pre-pandemic levels of revenue. The company will be reporting its first-quarter results for fiscal 2021 on Tuesday, Sep. 22, after the market closes. Here is what to look for when the company releases the figures.

A woman lacing up her tennis shoes.

Nike is hoping for a rebound in sales. Image source: Getty Images.

Nike is hoping for a swoosh-like recovery in revenue 

Among the most closely watched metric will be revenue. In its most recent quarter, Nike's revenue decreased by 38% from prior-year levels. As reopenings gained traction globally, Nike's revenue likely rebounded simultaneously. Meanwhile, the company's continued investment in increasing its digital fulfillment capacity should help increase sales. Street estimates indicate a 44% increase in total revenue, to $7.0 billion, from the previous quarter that ended in May. If revenue surges beyond expectations, it will likely be fueled by an increase in digital sales.

Further, it will be crucial to observe Nike's inventory levels. For the May-ended quarter, inventory rose 31% year over year. The company will likely have since reduced inventory levels that better match the current economic realities by adjusting to changes in demand that resulted from the coronavirus outbreak. However, it will still need to balance decreasing inventory with meeting consumer demand. The last thing the company would want is customers making a beeline to competitors because of availability concerns.

In addition to this, it will be important to check if Nike was able to swing back to a profit this quarter. In the previous quarter, Nike experienced a net loss of $790 million. A potential boost in profits would likely be fueled by digital sales which are twice as profitable for the company when compared to physical retail channels. 

Lastly, it will be interesting to hear what management says about the changes in people's exercising behavior and how that is affecting Nike. Many gyms are still closed around the world, and people are hesitant to go to gyms that have reopened. Moreover, the rise of alternative exercising options, such as the Peloton, during the pandemic is significant. Investors will want to know how these changes are affecting Nike. 

What this means for investors

After the the coronavirus outbreak-induced economic slowdowns, Nike is recovering along the lines of the broader economies of the world. Furthermore, the accelerated shift to digital will mean that Nike might come out of the pandemic in a better position than before the outbreak. For Nike, digital sales generate double the revenue versus wholesale, and with a higher gross margin, which translates into twice the operating income.

If Nike's revenue edges up toward pre-pandemic levels, but with a higher proportion of sales via digital channels, then investors may want to consider adding this consumer goods stock to their watchlist.