Nike is King of sportswear (and appoints successor)

More and more, Nike is crowning itself as the king of sportswear: the American sports giant was able to raise its quarterly sales by 5 % and its annual sales by as much as 10 %. Profits, however, are a wholly different story.

Better than expected

In the fourth quarter of Nike’s broken fiscal year, which ended on 31 May, global sales rose 5 % to 12.8 billion dollar (12 billion euros), just above analyst expectations of 12.6 billion. Its sub-brand Jordan grew 29 % to 6.6 billion dollar (6 billion euros) and, according to CEO John Donahue, would soon become the second-largest shoe brand in the United States – after Nike itself, obviously.

Increased costs for logistics and inventory put a damper on profits, however: gross margin went down slightly. However, stocks are now trending slightly positive again anyway.

Positive outlook

For the full financial year, turnover climbed 10 % to 51.2 billion (+ 16 % excluding currency effects). While in the third quarter there was still the asterisk that sales in “Greater China” continued to struggle with the effects of Covid, recovery seems to be fully underway in this key growth market as well.

There was less good news from net profit, which fell by almost 20 % to five billion dollars. However, this is said to be an investment in the future: by reducing inventories now with bigger discounts, the company is cutting costs it would otherwise still have next financial year.

In the new financial year, Nike has high hopes for the Women’s World Cup, which starts at the end of July in Australia and New Zealand. Further into the financial year, the brand hopes that the economic situation will improve again, both in terms of sea container prices (important for the profit margin!) and the possibility of having to sell more products without discounts again.