Nike posts earnings beat in Mark Parker's final report as CEO
Parker is set to step down as Nike’s CEO on Jan. 13
Outgoing Nike CEO Mark Parker’s final full quarter at the helm of the sports apparel giant ended with strong results that topped Wall Street’s expectations despite the impact of U.S. tariffs on Chinese-made goods.
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Parker is set to step down as Nike’s CEO on Jan. 13, though he will remain the company’s executive chairman of the board. Former eBay CEO John Donahoe will succeed Parker and he will spearhead the Nike's effort to build out its digital marketplace.
“Nike has proven again that innovation is our greatest competitive edge — turning athlete insights into breakthrough product and digital services, as we offer more choice to more consumers at an accelerated pace,” Parker said in a statement. “Our entire Nike team is fueling our current momentum, and I’ve never been more optimistic about the future of this company.”
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Nike reported second-quarter earnings of 70 cents per share, topping an expected 58 cents per share, according to Refinitiv data. Quarterly revenue was $10.33 billion, also beating Wall Street’s projections.
Despite the earnings, Nike shares fell as much as two percent in after-hours trading before paring losses. The company’s revenue from the critical North America market was $3.98 billion, just short of expectations. Gross margin grew at a slower rate than analysts expected.
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Nike’s second-quarter gross margin, or the difference between quarterly revenue and the manufacturing cost of goods sold, increased two percentage points to 44 percent. The company noted a negative impact from tariffs, which increased production costs.
Company executives had warned the ongoing U.S.-China trade dispute would impact second-quarter results.
Nike’s revenue in China rose 20 percent to $1.8 billion for the quarter.
Parker oversaw steady growth at Nike during his tenure, including more than $39 billion in revenue in fiscal 2019 alone. Despite the strong results, his leadership had come under question in recent years amid a series of scandals, including allegations of doping at the Nike Oregon Project and workplace misconduct allegations that resulted in the dismissal of several executives.