The Beaverton, Ore.-based athletic apparel and accessories agency, which incorporates the Jordan and Converse manufacturers, revealed quarterly earnings Thursday after the market closed, bettering on top-line revenues in all geographies due to power in each channel and a return to organized sporting occasions.
“Nike’s robust outcomes this quarter are continued proof of our deep shopper connections, unrelenting innovation pipeline and a digital benefit that fuels our model momentum,” John Donahoe, Nike’s president and chief govt officer, stated in an announcement. “We now have the correct playbook to navigate macroeconomic dynamics, as we create worth via our relentless drive to gas the way forward for sport.”
For the three-month period ending Aug. 31, increased 16 p.c to $12.2 billion, up from $10.5 billion final 12 months.
Nike’s direct-to-consumer enterprise rose 28 p.c in the course of the quarter, year-over-year, to $4.7 billion, due to power in Nike’s brick-and-mortar retail fleet, which exceeded pre-pandemic ranges. Digital gross sales additionally elevated in the course of the quarter, up 29 p.c. The North American digital enterprise rose probably the most — 43 p.c in the course of the quarter — in contrast with fiscal 12 months 2021’s first quarter.
Donahoe instructed analysts on the Thursday night convention name that the agency expects the vast majority of its income development to come back from digital gross sales in fiscal 2022, however added that the corporate will proceed to put money into brick-and-mortar retail.
“On-line to offline is changing into second nature,” he stated, referring to the halo impact e-commerce creates in native communities. (One instance are the two new small-format digital-centric stores Nike opened in Boston in August.)
The corporate logged $1.87 billion because of this, in contrast with $1.5 billion the identical time final 12 months.
“The adjustments taking place out there are taking place in our favor,” Donahoe stated on the decision. “Shopper shifts to digital that may have taken 5 years are actually solely taking two.”
By class, the largest income good points had been in footwear, adopted by apparel after which gear.
Donahoe added that development alternatives embody kids’s, girls’s attire, reminiscent of sports activities bras and yoga (Nike almost quadrupled its yoga enterprise within the final two years) and sustainability.
“Customers are clearly responding to sustainability,” the CEO stated. “We’re seeing robust full-price sell-throughs [in sustainable products].”
Nike teamed up with singer, songwriter Billie Eilish for 2 types of sustainable Air Jordan sneakers that can launch later this month. The retailer additionally launched the primary Serena Williams Design Crew collection earlier this month.
However traders weren’t glad. Shares fell greater than 3 p.c throughout Thursday’s after-hours buying and selling after failing to fulfill analysts’ expectations and continued points brought on by the pandemic.
Donahoe acknowledged some headwinds, what he referred to as “macro volatility,” as the corporate continues to “navigate via present provide chain points.
“We’ll deal with what we will management,” he stated. “Nike is doing what it all the time does: taking part in the offense.”
Nonetheless, Nike revised its full-year income outlook down because of this. The corporate now expects revenues to be within the midsingle digits, versus the prior estimates of low-double digits.
“Solely due to manufacturing facility manufacturing closures,” Matt Buddy, govt vice chairman and chief monetary officer at Nike, stated on the decision. “Within the final 90 days, already lengthy transit occasions worsened. Transit occasions have been growing, almost doubling, due to port congestion, rail congestion, provide shortages and labor shortages. Misplaced weeks of manufacturing and longer transit occasions will result in short-term stock points over the following few quarters.
“After which along with that, there’s Vietnam,” Buddy continued. “Meaning we’ve already misplaced 10 weeks of manufacturing. This has created a spot to the movement of stock, initially supposed to ship in October. It’s going to take us a number of months to ramp again as much as manufacturing.”
Buddy added that every one geographies will possible be impacted by stock shortages, however added, “These provide chain points, we imagine, are short-term.”
The corporate ended the quarter with $9.4 billion in long-term debt and $13.7 billion in money and money equivalents and short-term investments.
Shares of Nike, which closed up 1.33 p.c to $159.54 Thursday, are up almost 28 p.c, year-over-year.
https://wwd.com/business-news/monetary/nike-inc-earnings-1234940390/ | Nike Rides Continued Momentum Amid Pandemic Uncertainty – WWD