Just Do It? Nike Soars Despite Coronavirus Impact to Earnings

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Nike  (NIKE)  shares rose after its fiscal third quarter earnings met lowered estimates, as the company leveraged its superior e-commerce business to short up sales while consumers stay at home to avoid the coronavirus. 

The stock rose 6.56% to $77 a share in post-market trading, after having risen 15% in regular hours. 

Earnings per share came in at an adjusted 53 cents, in line with Wall Street’s estimates of 53 cents. Revenue was $10.1 billion, beating analysts estimates of $9.8 billion. 

Digital sales shined, rising 36% year-over-year, as consumers stay home and e-commerce globally sees a tailwind from the virus. Management said brick-and-mortar store closures resulting from the virus was the main culprit behind the unfortunate revenue result. 

Revenue and earnings did contract significantly year-over-year on account of the virus. China was weak in the beginning of the calendar year 2020 second quarter and the U.S. has been weak more recently. 

Looking ahead, Asia sales could recover by year end as the virus abates in the containment, padding the downdraft in earnings, analysts at Morgan Stanley noted in a pre-earnings note. 

The stock was down 31% from its all-time high hit in February, as 2020 earnings estimates at least have been decimated by the coronavirus’s economic wreckage previously in Asia and now in the U.S. That’s worse than the S&P 500’s bear market of 28%. 

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