(Reuters) – Nike beat quarterly profit expectations and posted a smaller-than-expected drop in revenue on Thursday, as customers flocked to the embattled sportswear brand’s stores and website to buy newly released versions of performance and running shoes.
Shares of Nike surged 11% in extended trade, adding $12 billion to the company’s stock market value.
With rivals launching more comfortable, better cushioned shoes, Nike has been scrambling to regain dominance in the market, shelling out money to introduce new products like Air Max 95, and to promote staple franchises like Jordans and Pegasus.
Investors on Thursday’s earnings call will be keen to hear more on new CEO Elliott Hill’s vision for how to rebuild Nike’s retail partnerships, boost innovation and sharpen its focus on its core business of running.
“After an energizing 60 days of being back with my Nike teammates, our clear priority is to return sport to the center of everything we do,” Hill said.
“We’re taking immediate action to reposition our business, so we can get back to driving long-term shareholder value,” he added.
Last month, the company under Hill announced it would double down on three running franchises – Pegasus, Structure and Vomero – by launching various iterations of each shoe next year, at different price points.The company’s second-quarter net revenue fell 7.7% to $12.35 billion. Analysts had expected a 9.41% fall to $12.13 billion, according to estimates compiled by LSEG.
Nike reported earnings per share of 78 cents, compared with estimates of 63 cents per share, according to analysts estimates compiled by LSEG.
(Reporting by Ananya Mariam Rajesh in Bengaluru and Nicholas P. Brown in New York; Editing by David Gregorio and Pooja Desai)
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