Nike posts strong Q1 earnings after ‘incredible summer of sport’

PORTLAND — Nike blew away Wall Street expectations with first-quarter earnings of $1.2 billion, 73 cents a share, on total revenue of $9.1 billion.

The consensus projection from analysts had the Beaverton company earning 56 cents a share on total sales of $8.86 billion.

The strong profits and sales may bolster confidence in Nike, which had fallen short of expectations in recent quarters. It was just a year ago that Parker stunned company watchers when he predicted Nike would surpass $50 billion in sales (from 2015 revenue of $30 billion) by 2020.

“Fueled by an incredible summer of sport, Nike delivered strong global growth and led the industry through disruptive innovation,” said company CEO Mark Parker. “Q1 also showed how we’re amplifying every category through sports style innovation, transforming retail by connecting the digital and physical experience and ushering in a new era of personalized performance.”

Nike’s paid a lot to capitalize on Parker’s “incredible summer of sport.” The Swoosh was omnipresent at the Summer Olympics. The company boosted its demand creation budget by 25 percent in the quarter to $1 billion.

Nike reported its gross profit margin declined 200 basis points to 45.5 percent despite higher average selling prices for its footwear and apparel. Those higher prices were more than offset by “a higher off-price mix and the impact of exiting the Golf equipment business.”