- Sportswear giant delivers better than expected Q4 earnings
- NIKE Direct sales up 11%
- Forecasts Q1 sales flat to slightly up
Sportswear goliath Nike (NKE:NYSE) posted better than expected fourth quarter sales and earnings despite the impact of supply chain disruptions and lockdowns in China, its most profitable market.
The Oregon-based athletic apparel leader also flagged that consumer demand has remained strong in the face of surging inflation.
Yet the shares fell after the bell on Wall Street after Nike’s first quarter revenue forecast disappointed with the company warning elevated transport costs and longer shipping times are persisting.
Nike also expects to discount more amid a highly promotional market environment over the summer.
Nike expects anticipates first quarter revenue will be flat to slightly up year-on-year as it continues to manage Covid disruption in Greater China, where the sneakers-to-soccer balls seller is rebuilding its business after a boycott of western brands by Chinese consumers hit sales early last year and home-grown competitors include Anta and Li Ning.
Nike now anticipates full year revenue will grow by low double-digits on a currency-neutral basis.
SERVING CONSUMERS DIRECTLY AT SCALE
The sportswear giant generated sales of $12.2 billion in the fourth quarter to May 2022, up 3% on a constant currency basis and ahead of the $12.06 billion called for by analysts, while earnings per share came in at 90 cents, above the 81 cents expected by Wall Street scribes.
‘Nike’s results this fiscal year are a testament to the unmatched strength of our brands and our deep connection with consumers,’ insisted CEO John Donahoe.
‘Our competitive advantages, including our pipeline of innovative product and expanding digital leadership, prove that our strategy is working as we create value through our relentless drive to serve the future of sport.’
Gross margin decreased by 80 basis points to 45% in Q4 with elevated freight and logistics costs partially offset by price increases and margin expansion in its NIKE Direct business, which forms a key plank of its growth strategy.
NIKE Direct fourth quarter sales were up 11% year on year. ‘In this dynamic environment, Nike’s unrivalled strengths continue to fuel our momentum,’ explained finance director Matt Friend.
‘Two years into executing our Consumer Direct Acceleration, we are better positioned than ever to drive long-term growth while serving consumers directly at scale.’
