Nike (NKE) earnings Q1 2023

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

Paul Ratje | AFP | beautiful pictures

Nike on Thursday said it had a strong fiscal first quarter despite supply chain issues, as well as a slump in sales in China, the third-largest market by revenue.

Like other retailers, Nike has faced supply chain difficulties, such as increases in both shipping costs and transit times, in recent quarters. The company said its inventory increased in the quarter year-over-year.

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

Here’s how Nike did in its first fiscal quarter compared to what Wall Street predicted, based on a survey of analysts by Refinitiv:

  • Earnings per share: 93 cents vs. 92 cents expected
  • Revenue: $12.69 billion vs. $12.27 billion expected

Nike reported net income for the three months ended Aug. 31 fell 22% to $1.5 billion, or 93 cents per share, compared with $1.87 billion, or $1.18 per share votes, a year earlier.

Revenue for the period rose 4% to $12.7 billion, compared with $12.2 billion a year earlier.

Recently, Nike changed its strategy and looked to sell its sneakers and other merchandise directly to customers and scale back what is sold by wholesale partners like Foot Locker. The company said on Thursday its direct sales jumped 8% to $5.1 billion, and revenue for digital brands grew 16%. On the other hand, sales for Nike’s wholesale business increased 1%.

In the first fiscal quarter, Nike said its inventory grew 44 percent to $9.7 billion on its balance sheet year-over-year, which the company said was due to supply chain issues. supply and partly offset by strong consumer demand.

Total revenue in Mainland China fell 16% to about $1.7 billion, compared with nearly $2 billion a year earlier. The company has faced disruption to its business in the region, where the Covid lockdown has impacted its business. Nike said last quarter that it expected issues in Greater China to affect its business.

Meanwhile, total revenue in North America, Nike’s biggest market, grew 13% to $5.5 billion in the first fiscal quarter, compared with about $4.9 billion in the same period last year. The athletic shoe giant has repeatedly said that consumer demand, especially in the US market, has not waned despite inflation.

Read the company’s earnings release here.

This story is evolving. Please check back for updates.

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