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Nike sales slump in North America and China

New York – The American sporting goods giant Nike announced financial results on Monday that beat expectations, even though its sales have slowed in North America and China and the group continues to suffer from a disrupted supply chain. .

Revenue for the company, which recently celebrated its 50th anniversary, fell 1 percent to $12.23 billion in the period ending May 31, corresponding to the fourth quarter of its fiscal year. Sales slowed especially in the North America region (-5 percent). Although this decline is related to the sharp increase observed the previous year (+141 percent), it also reflects “a slowdown in consumer demand” affected by inflation, suggests Neil Saunders of the firm GlobalData.

Nike also saw its turnover fall sharply in the zone grouping mainland China/Hong Kong/Macau/Taiwan (-19 percent), which underwent strict confinements because of the Covid-19 for several weeks. Sales of the Beaverton (Oregon) group, on the other hand, increased in the Europe/Middle East/Africa (+9 percent) and Asia/Pacific/Latin America (+15 percent) zones.

Adjusting for currency effects, Nike’s sales increased 3 percent. The company’s net profit, meanwhile, fell 5 percent to $1.4 billion. Reported per share and excluding exceptional items, the benchmark on Wall Street, it amounted to 90 cents, against 81 cents expected by analysts. The group’s gross margin suffered from high freight and logistics expenses as well as higher inventories in China. As of May 31, its inventories overall were 23 percent higher than a year earlier due in part to longer transit times related to supply chain issues.

Nike also saw its marketing and administrative expenses increase by 8 percent. For the full year, Nike’s revenue rose 5 percent to $46.7 billion, and net profit rose 6 percent to $6 billion.

Nike also announced a new four-year $18 billion share buyback program. The group’s stock rose 0.2 percent in electronic trading following the close of official trading. (AFP)

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