Nike (NKE) profit Q1 2023

A woman buys shoes at the Nike Factory Store at the Outlet Shoppes in El Paso, in El Paso, Texas on November 26, 2021.

Paul Ratje | AFP | Getty Images

Nike said Thursday it had a strong fiscal first quarter despite supply chain problems, as well as declining sales in Greater China, the third-largest market by revenue.

Like other retailers, Nike has faced headwinds in the supply chain, such as increases in both shipping costs and shipping times in recent quarters. The company said its inventory levels rose during the quarter compared to the same period a year ago.

The company’s shares fell about 5% in after-hours trading.

Here’s how Nike fared in its fiscal first quarter compared to what Wall Street expected, based on an analyst survey by Refinitiv:

Earnings per share: 93 cents vs. 92 cents expected Earnings: $12.69 billion vs. $12.27 billion expected

Nike reported that net income for the three-month period ended Aug. 31 fell 22% to $1.5 billion, or 93 cents per share, compared to $1.87 billion, or $1.18 per share, a year earlier.

Revenue during the period increased 4% to $12.7 billion, compared to $12.2 billion a year earlier.

Recently, Nike has changed its strategy to sell its sneakers and other merchandise directly to customers and scale back on what is sold by wholesale partners such as Foot Locker. The company said Thursday that direct sales grew 8% to $5.1 billion, and sales for its digital brand were up 16%. On the other hand, sales of Nike’s wholesale business were up 1%.

In its fiscal first quarter, Nike said its inventory rose 44% to $9.7 billion on balance sheet year-over-year, which the company said was driven by supply chain issues and partially offset by strong demand. of the consumer.

Total sales in Greater China fell 16% to about $1.7 billion, compared to nearly $2 billion a year earlier. The company has faced disruption to its operations in the region, where Covid lockdowns have impacted its operations. Nike had said in the previous quarter that it expected problems in Greater China to weigh on its operations.

Meanwhile, total sales in North America, Nike’s largest market, increased 13% to $5.5 billion in the first fiscal quarter, compared to about $4.9 billion in the same period last year. The sneaker giant has consistently said that despite inflation, consumer demand, especially in the US market, has not slowed down.

Read the company’s results here.

This story is evolving. Come back for updates.

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