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Home » blog » mixed performance in apparel and footwear sector recovery as nike online sales jump by 82 but under armour sales drop by 25
Disclosure Fact Checked

The retail industry divide is widening as the strong get stronger while others fight for survival. Mixed performance by key players in the apparel and footwear sector well illustrates this.

According to the research data analyzed and published by Stock Apps, Nike’s digital sales increased by a whopping 82%. During its first quarter of fiscal year 2021 (Q1 FY21), which ended on August 31, 2020, revenue totaled $10.6 billion, a drop of 1% year-on-year (YoY). Moreover, it was a significant improvement over the previous quarter’s performance. Sales in the previous quarter had dropped by over 30% due to forced shutdowns occasioned by the pandemic. But in Q1 FY21, almost all of its stores were open.

Net income for Q1 FY21 increased by 11% to $1.5 billion reversing the losses of the previous quarter. Diluted earnings per share were $0.95, an increase of 10%. It is noteworthy too that online purchases accounted for almost a third of the total business reported during the quarter.

Revenue during the previous quarter which ended on May 31, 2020 totaled $6.3 billion, a decrease of 38% YoY. Just like in the most recent quarter, digital sales accounted for 30% of total revenue. All in all, online sales increased by 75% during that period.

For the fiscal year 2020, revenue fell by 4%, totaling $37.4 billion as a result of the drop experienced during the fourth quarter. In the same period, digital sales increased by 47%.

Data from Statista ranks Nike as the leading brand in athletic apparel, accessories and footwear. For the period between January 2019 and January 2020, it took the first spot with $40.78 billion in annual sales.

 

User Activity on Nike Apps Shoots by 80% in China, 1M+ Downloads Globally for Four Consecutive Months

In the US, apparel sales dropped by 34% overall in the period between March and July 2020. According to data from the Commerce Department, clothing and clothing accessory stores were among the worst hit. In August, there was a sales decline of 20%.

Interestingly, however, sports bras, shorts and sweatpants saw a spike during the period according to NPD. To illustrate the shift in consumer preferences, Gap Inc., whose net sales dropped by 18%, reported a 6% increase in Athleta, its athleisure label.

Part of the reason for Nike’s performance improvements was its shift in its business approach to match changes in consumer trends. While riding out the coronavirus shutdown in China, it reported a rise of 36% in online sales in the region. As such, it rode the trend to cushion the drop in sales from physical stores.

There was a massive spike in the use of its personal training apps for home workouts in China. User activity shot up by 80% following stay-at-home orders. On the global front, Nike reported that for the fourth month in a row, its Run Club app had over a million downloads each month.

Based on these trends, Nike made extensive use of its website as well as shopping apps for the release of limited edition footwear. To harness the potential in the athleisure apparel space, it also introduced a new collection for yoga enthusiasts. For sneaker fans, it has capitalized on the SNKRS app to stir excitement around new shoe releases.

 

Lululemon Net Revenue Grows by 155% as Under Armour’s Declines by 41%

Lululemon is yet another example of a brand making the most of the ongoing shifts in consumer habits. During the fiscal quarter which ended on August 2, 2020, it reported a sales increase of 2% YoY that drove its total to $903 million.

In a bid to make up for lost sales due to temporary store closures, it shifted attention online. As a result, Lululemon’s online sales grew a remarkable 157% during the three-month period. Net revenue during the quarter was $554 million, an increase of 155% YoY.

On the other hand, Under Armour is among the big brands within the space that is not exactly optimistic about the overall 2020 outlook. The athletic apparel and sneaker maker estimates a revenue drop ranging between 20% and 25% for the second half of 2020.

Notably, its second quarter results were better than expected, with $707.6 million in revenue against an expected $543.8 million. It marked a 41% drop from $1.19 billion in the previous year’s quarter. Net loss increased to $183 million from $17.3 million YoY.

Under Armour’s apparel sales dropped by 42% as footwear and accessories revenue declined by 35% and 47%, respectively. However, due to the strengthening of its direct-to-customer sales, gross margins grew to 49.3%.

Adidas, on the other hand, reported a loss in Q2 2020 but is optimistic, eyeing a recovery in Q3. Its eCommerce sales during the quarter spiked by 93%, growing at triple-digit rates in April and May 2020.

sherine10sj@yahoo.com'
Nica San Juan
Nica San Juan

Nica is a BA Political Science graduate, startup founder and financial expert. She has an entrepreneurial spirit and started several startups from a young age, eventually becoming fascinated with stocks, cryptocurrencies and the blockchain economy. She specializes in financial tech and her expertise is in writing detailed tutorials and guides on how to invest in stocks and cryptocurrencies. Nica has written for many other websites, including Crypto Browser, Coin Review, LearnBonds, and Inside Bitcoins.

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