Nike Gets Needed Boost from Earnings Beat

Nike saw modest sales growth in its fiscal third quarter as it continues its push toward direct-to-consumer sales.

The Swoosh notched $10.9 billion in revenue, up 5% year-over-year (8% on a currency-neutral basis) in the quarter ending Feb. 28.

• NIKE Direct, its increasingly important direct sales platform, accounted for $4.6 billion of the company’s sales, up 15% from the same period last year. 
• The Nike Brand accounted for the vast majority of the company’s revenue — $10.3 billion — while Converse brought in $567 million.
• Nike Brand grew 13% year-over-year in the EMEA region.

The company beat estimates of $10.6 billion in revenue, and its stock rose around 6% in after-market trading.

Prior to the favorable earnings, Nike’s stock had dropped 20.9% on the year, as supply chain troubles related to Russia’s assault on Ukraine and difficulties in China have worried investors.

Nike cut off online sales in Russia following the country’s invasion of Ukraine, saying it “cannot guarantee delivery of goods to customers” there.

Sales slipped 5% year-over-year in the Greater China region to $2.2 billion.

DTC Shift

“Nike’s strong results this quarter show that our Consumer Direct Acceleration strategy is working,” said John Donahoe, Nike’s president and CEO. 

The company has curtailed relationships with third-party retailers. Foot Locker said it would lose some of its Nike merchandise in the next few years.

Nike is evaluating $1 billion in media spending in a review expected to last into the spring.