Please ensure Javascript is enabled for purposes of website accessibility

Nike Tramples Analyst Expectations With Its Q1 2021 Results

By Rhian Hunt – Sep 22, 2020 at 10:53PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Revenue was more than $1 billion higher than the consensus forecast.

Footwear and apparel titan Nike (NKE -0.65%) announced its fiscal first quarter 2021 results on Sept. 22, sprinting far ahead of analyst consensus expectations in both revenue and earnings per share (EPS). While revenue was down year over year in the most recent quarter ended Aug. 31 because of COVID-19's lingering effects, the drop was only approximately 1%, and the company gained in many other key metrics.

Nike's revenue of $10.6 billion was higher than the consensus analyst forecast of roughly $9.178 billion reported by Zacks Equity Research. Actual revenue delivered a positive 15.49% surprise. Zacks also reports that analysts expected $0.48 EPS, which the actual $0.95 diluted EPS beat by about 97%. Earnings per share were also up 10% year over year.

Multicolored sports shoes or running shoes on a store wall display.

Image source: Getty Images.

Driven by the ongoing coronavirus pandemic, Nike's digital sales grew by a scorching 82% compared to Q1 fiscal 2020. In comments on the company's performance, CEO John Donahoe noted that both customer loyalty and "digital acceleration are unlocking Nike's long-term market potential."

The company says roughly 90% of its brick-and-mortar sales locations worldwide were open for business by June during the quarter. Customer volume remained lower than normal, however, because of social distancing and the general unease of consumers about in-person shopping. Nike revealed that it slashed selling and administrative expenses by 11%, with advertising costs 33% lower than usual as a result of postponements or cancellations of live sports matches.

Unsurprisingly, investors bid the company's shares up more than 3% before market close. Nike already gained 14.6% during August as the market priced in its robust digital sales and the enthusiastic consumer reception given to its new product releases.

Rhian Hunt has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Nike. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Nike Stock Quote
$105.96 (-0.65%) $0.69

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.