Nike beat Wall Street expectations for fiscal fourth-quarter earnings and sales on Monday
Nike beat Wall Street expectations for fiscal fourth-quarter earnings and sales on Monday as the company weathered Covid-19-related shutdowns in China and tougher consumer weather in the United States.
The company reported net income for the three months ending May 31 of $1.44 billion, or 90 cents a share, compared to $1.51 billion, or 93 cents a share, a year ago.
Sales fell to $12.23 billion from $12.34 billion a year ago.
The athletic footwear giant expects fiscal first-quarter revenue to remain flat or just above a year earlier as Nike continues to manage turmoil in China.
The company's chief financial officer, Matthew Friend, said Nike expects higher ocean freight costs, increased product costs, supply chain investments, and higher levels of mass write-downs over the next year.
On a conference call with analysts, he said the company was "optimistic" as the new fiscal year approached, as production rose above pre-pandemic levels and inventory fell to new levels in our largest geographies.
Nike is in the midst of a shift in strategy, as the company sells more merchandise directly to buyers and reduces the amount sold through wholesale partners like Foot Locker.
Its direct sales increased 7% to $4.8 billion in the first quarter compared to the same period last year. In contrast, the company's wholesale sales fell 7% to $6.8 billion.
This strategy, which began about two years ago, is paying off, according to a friend.
“In this dynamic environment, Nike’s unmatched strengths continue to fuel our momentum,” he said in a press release, adding that the company is “better positioned than ever to drive long-term growth while directly serving consumers at scale.”