Nike Inc., the global sportswear giant, has announced its financial results for the third quarter of fiscal 2022. The company reported total revenues of nearly $11 billion, indicating a return to normal footfall levels in its owned stores worldwide. However, Nike’s net income for the three-month period ending February 28 decreased by 4% to $1.4 billion, with diluted earnings per share at $0.87.

The quarterly revenues for Nike reached $10.9 billion, which represents a 5% increase compared to the previous year and an 8% increase on a currency-neutral basis. Direct sales for the company saw a significant surge, reaching $4.6 billion, a 15% increase on a reported basis and a 17% increase on a currency-neutral basis. This growth can be attributed to the recovery of foot traffic in Nike-owned physical retail stores, with store sales increasing by 14%. However, wholesale revenues declined by 1% on a reported basis and increased by 1% on a currency-neutral basis. While Europe, the Middle East, and Africa (EMEA) and Asia Pacific and Latin America (APLA) witnessed growth, North America and Greater China experienced declines.

Nike brand digital sales experienced a significant boost, increasing by 19% or 22% on a currency-neutral basis. This growth was primarily driven by a 33% increase in North America, EMEA, and APLA, offsetting declines in Greater China. The revenues for the Nike brand amounted to $10.3 billion, an 8% increase on a currency-neutral basis, led by 13% growth in EMEA. Meanwhile, Converse, a subsidiary of Nike, reported revenues of $567 million, up 2% on a currency-neutral basis. Converse performed well in North America and Europe, but saw declines in Asia.

John Donahoe, the President and CEO of Nike Inc., expressed his satisfaction with the company’s strong results, attributing them to their “Consumer Direct Acceleration” strategy. Donahoe highlighted Nike’s investments in growth opportunities and emphasized their strong consumer connections, compelling product innovation, and digital advantage.

However, despite the positive financial performance, Nike’s net income declined by 4% due to increased demand creation expenses and operating overhead expenses. Demand creation expenses rose by 20% to $854 million, driven by brand campaign expenditure and investments in digital marketing. Operating overhead expenses increased to $2.6 billion, largely due to strategic technology investments and wage-related expenses.

Nevertheless, Nike remains optimistic about its future prospects. The company is confident that its consumer-focused strategy and commitment to innovation will continue to drive success in the dynamic sportswear industry.

Useful 2 links:
1. Nike Official Website
2. Nike Investor Relations