While the stock market has not looked good for many, recent releases of Air Maxes by the sports company has driven Nike stocks to surge much higher than expected. Read more for details.
As the global economy continues to spiral down, things have not been looking good for many businesses. As for the US economy, the non-agreement between the Republicans and the Democrats over additional stimulus aid has further complicated the situation. But, good news arrived for this top sports company as Nike stocks surge, thanks to their online sales.
Right before the Wall Street estimates began, Nike shares increased unexpectedly by a significant 13 percent, indicating a record high stock. Market analysts predict that it will hit a record high of $132 when shares open later on Wednesday.
Nike Stocks See Unprecedented High In Online Sales
Like a lot of companies, physical store sales have dropped to devastating lows since the onset of the COVID-19 pandemic. Nike combatted this issue by focusing on online sales via its apps and website.
The company’s first-quarter ended on 31st August with an 82 percent increase in online sales. Prior to this, the company has witnessed a 75 percent increase in Nike’s digital sales record. As per reports, Nike online sales have increased by double digits across all the regions it covers.
John Donahoe, chief executive at Nike, told media sources that the modern consumer is tech-savvy and grounded in the digital world. He further complimented digital marketing strategies and added that there is no going back.
The company stated that they are expecting their second half online sales to increase even higher. As per Refinitiv IBES, Nike’s fiscal sales for 2021 is likely to increase by 5.9 percent.
Stock Market Analyst Predict A Better Second Quarter
The prediction is supported by the fact that several retailers (who had closed or slowed down in Nike dealing after the pandemic hit) are planning to go into business again. This means that Nike’s second-half fiscal year will be better than its current high. The American retailers include Dick’s Sporting Goods Inc and Foot Locker Inc.
North America is one of Nike’s most profitable markets. Their revenue, prior to taxes and interest, increased by 18 percent in this region.
Nate Fisher from Strategic Wealth Partners confirmed that Nike had a great first quarter. He also added that Nike stocks were prized perfectly. However, he added that if the company misses any quarter, Nike stocks will most likely be sold off.
Tuesday’s news comes as a great surprise to the stock market as just recently, Nike announced a debilitating $790 million loss as several retailers had canceled their orders. Furthermore, since their major stores are in China, Europe’s and North America, the coronavirus lockdowns had further worsened their situation.
Moreover, it looks like Nike Stocks are benefitting from supporting social movements such as Time To Vote and Black Lives Matter.