Nike saw its sales go up 17 % this quarter, almost the highest growth in a decade. Black Friday and Cyber Week heavily boosted demand for its trainers and sportswear.
Ready for the holidays
Nike had its second best quarter in more than a decade, with sales rising 17 % to 13.32 billion dollars (12.5 billion euros). The fourth quarter of 2021 did better with a 95 % growth, but this was not a reliable basis for comparison as shops had just reopened after the Covid restrictions.
Demand was particularly strong in Nike’s domestic market (+ 30 %), as consumers can look forward to a year-end period without sanitary restrictions for the first time in a long while. Particularly during the week of Black Friday and Cyber Monday, sales growth broke all records. In Europe, the Middle East and Africa, sales increased by 75 % compared to last year, but China continued to suffer from anti-pandemic measures (- 3 %).
Supply still fragile
However, margins remain under pressure as price-sensitive customers rely on high discounts and promotions. Gross margins fell by 300 base points to 42.9 %. Although, to Nike’s relief, supply problems have finally been resolved, freight and logistics costs remain higher. The relief may also be short-lived though, as China is already grappling with another crippling pandemic outbreak.
CFO Matthew Friend nonetheless remains optimistic. Nike is well on its way with clearing stocks and shipments for the spring are already arriving more quickly. This should also allow the company to better regulate margins and prices in the coming months. The sneaker brand expects to close the financial year in May 2023 with sales growth of around 10%, excluding currency effects.