Companies

Nike posts solid performance

Dec 22, 2021 United States

The US-based company reported strong performance in the second quarter of fiscal 2022, driven by sales in the North America region, and amidst ongoing impact of supply chain disruptions

"Nike's strong results this quarter provide further proof that our strategy is working, as we execute through a dynamic environment. We are now in a much stronger competitive position today than we were 18 months ago. And I want to thank our roughly 75,000 global teammates for all their work to provide consumers with the compelling new product, innovation and experiences that only Nike can deliver”, commented John Donahoe, President and CEO of Nike.

Matt Friend, Executive Vice President and Chief Financial Officer of Nike, added, “Our second quarter results reflect our deep consumer connections, the continued strength of our brands and strong marketplace demand. As we navigate through short-term supply challenges, we are focused on executing our Consumer Direct Acceleration strategy to fuel our long-term financial outlook”.

Second Quarter Results

During the second quarter of fiscal 2022, Nike’s revenue increased by 1%, reaching 11.4 billion US dollars, as compared to the same period of last year; flat on a currency-neutral basis. The company observed that it is still managing the ongoing impact of supply chain disruptions across the marketplace.

Nonetheless, while revenue in Greater China and APLA* declined by 20% and 6%, respectively, due to lower levels of available inventory resulting from COVID-19 related factory closures, the North America and EMEA** regions delivered growth of 12% and 9%, respectively, due to higher levels of in-transit inventory entering the second quarter.

In the second of the current fiscal year, revenue of Nike brand totalled 10.8 billion US dollars, flat on a currency-neutral basis, driven by Nike’s direct growth, but offset by lower revenue in the wholesale business. Revenue for Converse rose by 16% on a currency neutral-basis, adding up to 557 million US dollars, led by strong performances across all channels in Europe and North America.

Over the second quarter of fiscal 2022, direct sales grew by 9% on a reported basis and by 8% on a currency-neutral basis, reaching 4.7 billion US dollars, as compared to the prior quarter of fiscal 2021. In this period, digital sales increased by 12%, or 11% on a currency-neutral basis, led by 40% growth in the North America region, on a comparable basis to similar period of last year.

Gross margin increased by 280 basis points to 45.9% from the second quarter of fiscal 2021. Net income totalled 1.3 billion US dollars in the second quarter of the current year, increasing by 7% on a comparable basis to the same period of the prior year.

*APLA – Asia Pacific & Latin America
** EMEA – Europe, Middle East & Africa

Image Credits: modern-noriety.com

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