Nike’s quarterly profit fell 22%

American company Nike published September 29 financial statements for the first quarter of fiscal year 2023 ended at the end of August. The company’s net income fell 22% to $1.5 billion. Nike’s revenue during this period increased 4% to $12.7 billion.

After the publication of financial statements, Nike shares fell 10%. According to experts, investors were worried not so much about the decrease in the company’s profit, but about the information about the huge inventories accumulated by Nike. This is due to ongoing disruptions to supply chains, which is causing companies to build up inventories. In the case of Nike, such inventories increased by 44% compared to last year, and in the US even by 65%. According to the company’s financial director Matthew Friend, items from the collections of the past two seasons arrived at the company’s warehouses later than planned, while items from the new collection were delivered there earlier than usual to meet demand for the pre-holiday season. According to Mr. Friend, in this regard, Nike is going to “eliminate more aggressively” things from old collections, that is, the company has to sell them at deep discounts.

The need to sell at a discount has already affected Nike’s financial results. Another reason for the decline in profits is the decline in sales in China due to lockdowns being introduced in some cities. Sales in China in the first quarter fell by 16% to $1.7 billion. In addition, Nike’s results were negatively affected by the strengthening of the dollar against various local currencies.

Yana Rozhdestvenskaya