What's going on?
Nike’s share price swooshed to an all-time high on Wednesday after the sportswear giant just nailed its latest quarterly results. And a stronger-than-expected update from British fashionista Boohoo was enough to stop its investors shedding a tear…
What does this mean?
Nike’s revenue and profit both exceeded investors’ forecasts: poaching US customers from rival Under Armour helped Nike’s sales there grow 4% above last year’s tally. And there were even bigger ticks internationally: sales grew almost 30% in China, despite its consumer spending slowing overall.
Global vibes are part of Boohoo’s lookbook too. Non-UK sales account for 40% of the online outfitter’s total revenue – and they’re growing twice as fast as its business back home. That helped both Boohoo’s sales and profit in the last six months rise over 40% higher than the same time last year. Talk about fast fashion…
Why should I care?
For markets: Investors lap up novelty.
Investors sprinted to buy up Nike’s stock on Wednesday. That was perhaps thanks to the company raising the bar for ecommerce sales this year: as these avoid middleman retailers taking a cut, it’s not much of a jump from there to even higher Nike profit. It was a sadder story for Boohoo, however: the company had already raised its annual earnings forecast earlier this month, effectively rendering its Wednesday announcement old news to investors. Canny sellers looking to lock in a profit stopped new buyers pushing Boohoo’s share price even higher.
Zooming out: One brand versus many.
Throughout its 55-year history, Nike’s typically relied on the strength of a single brand to keep it a hit in get-fit kit. But with rapidly changing fashions shortening many products’ life cycles, Boohoo’s hoping multiple brand acquisitions (including a struggling Karen Millen) and tie-ups with reality TV celebrity influencers will help it get ahead. Nike’s own recent approach might lend weight to that view: it’s expanding its Air Jordan footwear range – and “Sterling” soccer boots could be the next big thing.