June 15, 2024

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Nike (NKE) earnings for the first quarter of 2023

Nike (NKE) earnings for the first quarter of 2023

A woman shops for shoes at the Nike Factory Store at Outlet Shops in El Paso, El Paso, Texas on November 26, 2021.

Paul Rateji | AFP | Getty Images

nike On Thursday, it said it had a strong first fiscal quarter despite supply chain issues, as well as declining sales in Greater China, its third-largest market by revenue.

Like other retailers, Nike has faced supply chain headwinds, such as higher freight costs and shipping times in recent quarters. The company said that its inventory levels inflated during the quarter compared to the same period last year.

The company’s shares fell about 5% in after-hours trading.

Here’s what Nike did in its first fiscal quarter compared to what Wall Street was expecting, based on an analyst poll by Refinitiv:

  • EPS: 93 cents vs. 92 cents expected
  • Revenue: $12.69 billion vs. $12.27 billion forecast

Nike Inc. reported net income for the three months ending August 31 down 22% to $1.5 billion, or 93 cents a share, compared to $1.87 billion, or $1.18 a share, a year earlier.

Revenues during the period rose 4% to $12.7 billion, compared to $12.2 billion a year earlier.

Recently, Nike has been changing its strategy and is looking to sell its sneakers and other merchandise directly to customers and cut back on what wholesale partners like Foot Locker sell. On Thursday, the company said its direct sales grew 8% to $5.1 billion, and its digital brand sales rose 16%. On the flip side, Nike’s wholesale sales increased 1%.

In its first fiscal quarter, Nike said its inventory was up 44% to $9.7 billion on its balance sheet compared to the same period last year, which the company said was driven by supply chain issues and partially offset by strong consumer demand.

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Total sales in Greater China fell 16% to about $1.7 billion, compared to about $2 billion in the previous year. The company faced disruption to its business in the region, as the Covid shutdown affected its business. Nike said in the previous quarter that it expects issuances in Greater China to affect its business.

Meanwhile, total sales in North America, Nike’s largest market, rose 13% to $5.5 billion in the first fiscal quarter, compared to about $4.9 billion in the same period last year. The sneaker giant has consistently said that consumer demand, especially in the US market, has not diminished despite inflation.

Read the company’s earnings statement over here.

This story is developing. . Please check back for updates