Nike reported a 4% increase in first-quarter revenue to $12.69 billion, beating analysts’ estimates of $12.27 billion.
But Nike’s net income dropped 22% year-over-year to $1.5 billion, and the company’s stock was down more than 12% as of market close Friday. Before the report, shares had declined around 40% on the year.
Nike CFO Matthew Friend said the quick improvement of transit shipping time, which was previously affected by supply chain issues, led to increased inventories.
- The Swoosh reported a 44% year-over-year jump in inventories to $9.7 billion.
- Compared to one year ago, inventories in North America are up 65%.
- Inventory in transit rose 85% since last year.
“We are taking decisive action to clear excess inventory,” Friend said, adding that the increased inventory levels are due in part to late arrivals.
Nike will mark down more goods, especially apparel, to reduce inventory and work with its wholesale partners. In the second quarter, Nike expects inventory levels to normalize and revenue to increase 10%.
North American sales increased 13% to $5.5 billion, sales in Greater China declined 16% to around $1.7 billion, sales in Europe, the Middle East, and Africa increased 1% to $3.3 billion, and sales in Asia Pacific and Latin America increased 5% to $1.5 billion.
New Deal
On Friday, Nike announced JD Sports and Zalando as the first European companies to be part of its Connected Partnership loyalty program, which launched in November with Dick’s Sporting Goods in the U.S.
