Nike (NKE) Q3 2023 earnings

People wearing protective face masks walk past a closed Nike store on 5th Avenue, during the coronavirus disease (COVID-19) outbreak, in New York City, May 11, 2019. 2020.

Mike Segar | Reuters

Nike beat Wall Street’s expectations for fiscal third-quarter earnings and revenue, though its margins continued to decline as investors watched its direct-to-consumer strategies to bring effective again.

The company’s shares were up about 3.5% in after-hours trading on Tuesday.

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This is how the sneaker giant did it third fiscal quarter of 2023 compared to what Wall Street predicted, based on a survey of analysts by Refinitiv:

  • Earnings per share: 79 cents vs 55 cents expected
  • Revenue: $12.39 billion versus $11.47 billion expected

The company’s reported net income for the three-month period ended February 28 was $1.2 billion, or 79 cents per share, compared with $1.4 billion, or 87 cents. per share. a year ago.

Revenue rose to $12.39 billion, up 14% from $10.87 billion a year earlier.

Nike, like other retailers, is in the process of offload a large amount of inventory caused by supply chain disruptions and changing consumer demand are weighing on its bottom line.

While Nike CEO John Donahoe told investors last quarter that he believes the company has surpassed peak inventory levels, gross profit margins are expected to decline in the holiday quarter as the company’s earnings rise. The company continues its liquidation and promotion efforts.

Over the past few years, Nike has worked hard to build direct-to-consumer sales and has invested heavily in this channel by building experiential stores, developing loyalty programs, and increasing sales. e-commerce sales numbers. Along the way, it severed ties with a host of wholesalers but ended up relying on those partnerships last quarter to reduce its bloated inventory.

On Monday, Foot Locker CEO Mary Dillon touting an “innovation” and revived its relationship with Nike, its biggest brand partner.

Nike, which has consistently beat Wall Street’s revenue and profit expectations over the past year, is looking to see a sales recovery in China, the third-largest market by sales. revenue, as the region recovers from the Covid pandemic. Sales in China weakened as consumers faced strict lockdowns and increased infections but for the quarter the country canceled its Covid-free policy.

A consumer study in China and North America conducted by Citi found that the region is recovering, but consumers have not yet returned to pre-pandemic levels of shopping.


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