Nike sales rise despite net income decline
Nike Inc. has released its financial results for the first quarter ending 31 August 2022, revealing a 10% increase in group revenues on a currency-neutral basis to £11.3 billion ($12.7 billion).
The group's sales growth was largely driven by Nike direct growth of 14%. Growth was also drive by an 8% increase in wholesale revenues, partially due to improved levels of available supply of inventory for partners.
However, the group saw a 22% decrease in net income to £1.3 billion ($1.5 billion) and a drop in gross margin of 220 basis points to 44.3%, driven by freight and logistics costs, higher markdowns and "unfavourable" changes in net foreign currency exchange rates, partially offset by strategic pricing actions.
Revenues for the Nike brand were up 10% on a currency-neutral basis to £10.7 billion ($12 billion), led by double-digit currency-neutral growth in North America, EMEA and APLA, partially offset by declines in Greater China.
Revenues for the Converse brand were up 8% on a currency-neutral basis to £575 million ($643 million), led by double-digit growth in North America and Europe, partially offset by declines in Asia.
John Donahoe, Nike Inc. President and CEO, said: "Our strong start to FY23 highlights the depth and breadth of Nike's global portfolio, as we continue to manage through volatility. Our competitive advantages, including the strength of our brand, deep consumer connections and pipeline of innovative product, continue to prove that our strategy is working. We expect our unrelenting focus on better serving the consumer to continue to fuel growth and create value like only Nike can."
Matthew Friend, Nike Inc. EVP and CFO, added: “Nike's first quarter results set the foundation for another year of strong growth. Our focus continues to be the consumer, as we take action to navigate near-term dynamics while expanding long-term structural benefits through our consumer direct acceleration strategy.”