Nike’s Earnings Robust Amid Supply Chain Issues

Nike kept its momentum going in its fiscal first quarter of 2022, posting $12.2 billion in revenue, a 12% increase year-over-year.

The revenue figure was nearly identical to the $12.3 billion the sneaker and apparel giant posted last quarter, which represented a 96% increase over the same period last year. 

• Net income grew 23% year-over-year to $1.87 billion for the three months ending Aug. 31.
• Nike’s digital business grew by 25% overall and 43% in North America. Its physical retail presence increased by 24%. Nike has cut down on partnerships with third-party retailers, including ending a deal with Amazon in 2019.
• However, the Swoosh has struggled to bring customers back to its brick-and-mortar locations, with foot traffic down in June (14.5%), July (5.1%), and August (14.3%) compared to 2019, according to Placer.ai. 

The pandemic is hampering the company’s supply chain: finance firm BTIG estimated that Nike could lose 160 million pairs of shoes due to manufacturing facility closures in Vietnam. Nike produces roughly 50% of its footwear and 30% of its apparel in Vietnam.

Sales in its Asia Pacific and Latin America region grew 33% year-over-year to $1.47 billion. Greater China sales grew the least of all its regions, notching 11% year-over-year growth to reach $1.98 billion.

Shares were down around 2% in after-hours trading, as revenues fell just short of analyst expectations.