Nike reports Q1 profit of $1.45 billion, beats estimates
- Nike's inventories fell 10% in the quarter ended August 31, indicating the company was successful in reducing excess product ahead of the holiday season, quelling investor fears that it would be forced to offer steep discounts, Reuters reported.
Nike, the world's largest sportswear maker, beat Wall Street estimates for first-quarter profit led by higher prices of its sneakers and apparel.
The company reported a profit of $1.45 billion, or 94 cents per share, beating estimates of 75 cents per share. Its total revenue of $12.94 billion in the quarter, missed analysts' estimates of $12.98 billion.
Nike's inventories fell 10% in the quarter ended August 31, indicating the company was successful in reducing excess product ahead of the holiday season, quelling investor fears that it would be forced to offer steep discounts, Reuters reported.
The sportswear maker also forecast a 100 basis point increase in second-quarter gross margins, following six consecutive quarters of declines, on the back of fewer planned markdowns and lower freight costs.
The company maintained its annual forecasts and said it expected second-quarter revenue to be up slightly. Analysts had expected a 2.1% rise to $13.59 billion, according to LSEG data.
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“We will build on the consumer momentum around running and modern comfort,” Chief Financial Officer Matthew Friend said, adding the company would lean on its sneaker series such as Air Max 1, Infinity and V2K to cash in on the growing demand for running shoes.
The company will also refresh its portfolio of basketball shoes across the Nike and Jordan brands in terms of style, as well as focus on its new Kobe brand, Friend added.
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Nike’s North America revenue fell 2% and was just below expectations. Greater China sales cooled, with growth of 4.8% falling short of estimates.
Nike CEO John Donahoe said the company would turn its attention to “prioritizing the everyday runner” and connecting with shoppers in more channels, including specialty running stores.
Nike share price jumped as much as 9.6% in after-market trading. Nike shares have dropped 23% year-to-date.
(With inputs from Reuters)
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First Published:29 Sep 2023, 08:28 AM IST
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