Steeper discounts and increased promotions to reduce excess inventory through the quarter helped Nike boost sales and attract recession-wary customers. Wealthier shoppers also helped maintain a pandemic-led boom in athletic apparel sales. — Reuters
NEW YORK: Nike Inc reported its best quarterly revenue growth in more than a decade, barring one quarter, and handily beat profit expectations, as North American shoppers rushed to stock up on sneakers and sportswear before the holidays.
Shares in the world’s largest sportswear maker surged 13% in after-market trading.
Steeper discounts and increased promotions to reduce excess inventory through the quarter helped the Beaverton, Oregon-based company boost sales and attract recession-wary customers. Wealthier shoppers also helped maintain a pandemic-led boom in athletic apparel sales.
Nike’s finance chief Matthew Friend said on a post-earnings call that the company had made good progress in clearing inventory during the quarter, and that products for the spring season were arriving earlier with faster transit times.
He added that the company saw record demand during the Black Friday and Cyber Monday period in North America, while in Europe, Middle East and African regions, Nike saw its biggest Cyber Week with demand having increased by 75% from last year.
“It does look like Nike’s situation (and the whole industry, probably) is improving because the shipping problems have mostly been fixed,” Morningstar analyst David Swartz said.
“Nike’s ability to gets its product on time will help it to manage inventories, margins and pricing better in the next few quarters,” he said.
Nike posted a profit of 85 US cents (RM3.77) per share in the second quarter ended November, topping an average estimate of 64 US cents (RM2.84), according to Refinitiv data.
Revenue jumped 17% , beating an average estimate. That was its best showing in 42 quarters, barring a 95% surge in the fourth quarter of 2021 when retail stores had just started to open up after a year of pandemic lockdowns.
Sales in North America, Nike’s largest market, surged 30%, while those in its most profitable market, China, fell 3% due to Covid-related restrictions in the country.
Swartz said the China business was showing signs of improvement since the Chinese government had relaxed curbs. — Reuters
