- Nike reported better-than-expected profits and gross margin and reduced inventory by 10%.
- Sales increased in all regions except South America. Nord, which saw a 2% decline.
- The sportswear retailer said it benefited from strategic pricing actions.
Nike (NKE) shares rose by more than 6% in early trading Friday at 11 a.m. ET after the sportswear retailer posted better-than-expected profit and gross margin and reduced inventory.
Nike reported first-quarter fiscal 2024 earnings per share (EPS) of $0.94, up 1% from last year and above analyst estimates. Gross margin was 44.7%, and although it was 10 basis points (bps) lower than 2022, it also exceeded forecasts. The company said it had benefited from “strategic pricing measures.”
Revenue rose 2% to $12.9 billion, but that was below expectations – the first time that had happened in two years. Sales fell 2% in Nike's largest market, North America. In contrast, sales increased by 8% in Europe, the Middle East and Africa; 5% in China; and 3% in Asia-Pacific and Latin America.
The company noted that its inventory fell 10% to $8.7 billion. , “primarily due to a decrease in unit count, partially offset by product mix and increased product input costs.”
Chief Financial Officer Matthew Friend noted that Nike was “very comfortable” with the level of inventory in the market relative to retail sales.
Nike shares hit a 11- Wednesday, their lowest month, and despite Friday's gains, they were still down almost 20% for 2023.
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