- Nike’s Q3 financial results exceeded Wall Street’s expectations, with reported revenues increasing by 14% to $12.4 billion.
- The company’s success was attributed to its Consumer Direct Acceleration strategy, strong product innovation, and digital advantage. Nike experienced double-digit growth in North America, EMEA, and APLA, with growth in Greater China offset by a challenging December following COVID-19 policies.
- Converse revenues also increased by 8% to $612 million, led by double-digit growth in North America.
Nike Direct sales grew by 17% to $5.3 billion, while Nike Brand Digital sales increased by 20% to $11.8 billion. However, the gross margin decreased by 330 basis points to 43.3% due to higher markdowns, foreign currency exchange rates, and product input costs. - The company’s selling and administrative expenses also increased by 15% to $4.0 billion due to higher operating overhead expenses.
- Nike’s net income was $1.2 billion, down by 11% from the prior year. Inventories for Nike increased by 16% to $8.9 billion, driven by higher input costs and freight costs. Despite the higher inventory levels, Nike said it is working on building out its direct-to-consumer sales while investing in experiential stores, loyalty programmes and e-commerce sales.
- Nike returned approximately $2.0 billion to shareholders through dividends and share repurchases.
Nike’s CEO, John Donahoe, believes their playbook allows them to navigate volatility as they create value and drive long-term growth. Looking ahead, Nike expects revenue to grow by high single digits in the fiscal year, compared to the mid-single digits guidance it gave in the previous quarter. The company expects inventory to remain at healthy levels by the end of the year, and sales momentum is expected to lead to even lower inventory.By Lee Kern
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