What's going on?

Nike announced quarterly results late on Tuesday that dunked on investors� expectations, and the sportswear giant�s shares initially sprang up 9% on Wednesday.

What does this mean?

Nike�s quarterly revenue might�ve been slightly lower than the same time last year, but it wiped the floor with investors� forecasts, and its profit � which rose versus last year � did too. Just as Nike predicted back in March, sales in China and Europe climbed in line with the post-pandemic recovery, but those in North America � Nike�s biggest market � weren�t in such good shape.


Nike�s outrageous three-pointer last quarter came from ecommerce, with online sales up 82% on the same time last year (tweet this). No surprises there: it�s been investing in its website and apps, transforming smaller stores into collection hubs, and picking up customers who were avoiding malls like the � well, you know. Oh, and that means ecommerce now represents a third of its overall sales � a target the sports brand didn�t expect to hit till 2023.

Why should I care?

For markets: Nike’s got competition.

Nike also forecasted it�ll grow its annual revenue by �high single digits� � so 7-9%, up from its June prediction of, well, 0%. That so-called �beat and raise� doesn�t just help explain why Nike�s stock rose, but its rivals� too: Under Armour�s shares were initially up 6%, while Europe�s Adidas and Puma jumped 5%. They haven�t even given their updates yet, but investors probably think a positive update for Nike bodes well for other sports brands.

Zooming in: Just do it yourself.

Ecommerce could be a game-changer for Nike�s earnings: it enables the sportswear brand to sell directly to consumers (DTC), rather than through third-party retailers that take a cut. And while an online DTC business does come with extra costs like warehousing, shipping, and returns, that won�t matter if it has enough sales: increased profitability will allow it to reinvest in the business, not to mention repay shareholders via higher dividends and share buybacks.