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Nike shoes are displayed at a Nike Store on August 10, 2018 in San Francisco, California.
Nike posted double-digit earnings growth during its fiscal first quarter as the company works to reshape its business and courts controversy with a new ad campaign featuring former San Francisco 49ers quarterback Colin Kaepernick, the company said Tuesday.
Its shares fell 4.5 percent in after-market trading despite a 10 percent rise in revenue to $9.95 billion and 15 percent jump in profit to $1.1 billion.
It’s also the company’s first full quarter since CEO Mark Parkerapologized in May for missing a sexual harassment scandal that rocked the Oregon sneaker maker and cleared out several senior executives earlier this year.
Here’s what Nike reported for the 13-week period ended Aug. 31, compared with what analysts surveyed by Thomson Reuters were expecting:
- Adjusted earnings per share: 67 cents vs. 63 cents expected.
- Revenue: $9.95 billion vs. $9.94 billion expected.
The earnings report comes on the heels of its Kaepernick ad campaign, which initially sent Nike shares south and caused a wave of backlash on social media. The football player has become a lightning rod for controversy after kneeling, instead of standing, for the National Anthem during the 2016 season to protest police brutality against people of color.
The stock has since rebounded, recently hitting an all-time high of $86.04 a share. Shares continued to climb in the days ahead of Tuesday’s earnings report. Analysts say the campaign should actually boost sales, as Nike draws support from younger shoppers that have backed Kaepernick along his journey.
It’s not the first time the company’s been in the news this year.
Former President Trevor Edwards, who was widely expected to succeed Parker as CEO, was forced to retire last month amid complaints of rampant sexual harassment and discrimination. Parker apologized for the company’s conduct in May and has implemented a number of changes to ensure women and minorities are treated with respect. Several female employees who are no longer with the company are suing Nike over pay discrimination.
Nike is, meanwhile, trying to sell more directly to consumers and court female customers. In the U.S., where sales growth has stalled of late for many sportswear retailers thanks to a series of bankruptcies from Sports Authority and other wholesalers, Nike is investing in stores and in women’s athletic wear, rivaling Lululemon.
This is a developing story. Please check back for updates.
