Nike beat earnings expectations for the quarter ended Nov. 30. The athletic apparel company was able to boost revenues by 9%, even in the midst of the pandemic. Meanwhile, Under Armour is hoping its new “Curry Brand” will guide it back toward growth.
Predictably, most retail companies have struggled this year, due to the global pandemic. Temporary store closures and health-cautious shoppers aren’t a recipe for retail growth. A few retailers, however, were still able to thrive, predominantly through strong digital sales. That’s how Nike blew past earnings estimates in its most recent quarter.
Nike’s Online Sales Throttle Earnings
Nike’s digital sales jumped 84%, driving a 12% improvement in earnings. Analysts estimated earnings of 62 cents per share, but Nike was able to post 78 cents per share. Nike’s financial strength allowed it to add sponsored professional athletes.
Meet the next wave of Jordan Brand.
— Jordan (@Jumpman23) December 18, 2020
Based on its stellar performance, Nike raised its full fiscal-year sales estimates. Initially, the company hoped revenues would increase by up to 10%. Now, it expects sales growth in the low teens. That’s an estimate its competitor, Under Armour, can only dream of.
UA Ditches Bearcats, Doubles Down on Curry
Under Armour expects its full-year sales to decline by a percentage somewhere in the high teens. Even before the pandemic, however, UA was struggling. As a result, it didn’t have the same luxuries as its better-positioned competitors.
In May, UA was desperately negotiating payment delays to its sponsored athletes. By June, it started terminating some college contracts, triggering a $200 million lawsuit from UCLA. Even now, UA continues to ditch its college deals. Last month, it cut ties with the University of Cincinnati Bearcats. That’s allowed rivals, like Nike, to fill the void.
Welcome to the family, UCLA.
The historic program brings their championship mentality and tradition of excellence to the Jordan roster. Read more about the new partnership, including when to expect official UCLA x Jordan Brand apparel in 2021.
— Jordan (@Jumpman23) December 8, 2020
UA knows it needs to do more than cut costs. That’s where the Curry Brand — in conjunction with NBA star Stephen Curry — comes in. The new brand, announced earlier this month, is designed to rival Nike’s Jordan Brand.
While the Curry Brand launch missed the lion’s share of holiday shopping, it coincides with the start of the NBA season. While Curry’s Golden State Warriors had a lock on the Pacific Division in the past, they are underdogs behind the Lakers and Clippers, this year.
Disclosure: Amy Calistri owns a meager position in Nike stock.