Despite Supply Chain Issues and Weak Sales in China, Nike's Performance Surpasses Expectations...

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Global sports brand Nike recorded earnings growth that exceeded market expectations despite supply chain issues and sluggish sales in China.

According to Bloomberg and other sources on the 21st (local time), Nike announced in its earnings report that its global sales for the third quarter of the fiscal year (December last year to February this year) reached $10.9 billion (approximately 13.3 trillion KRW), a 5% increase compared to the same period last year. The market had expected sales to be around $10.6 billion.

North American sales increased by 9% during the third quarter, driving the earnings growth, while sales in China decreased by 5% compared to the previous year. Last year, Nike’s sales were hit due to a boycott of Western brands among Chinese consumers, but the market is currently in a recovery phase. CNBC explained that Nike focused on its largest market, North America, during the pandemic period.

John Donahoe, Nike’s Chief Executive Officer (CEO), referred to the better-than-expected earnings, stating that it proved Nike can perform well in a highly volatile environment, and said, "Market demand will continue to significantly exceed supply." Under CEO Donahoe, Nike has been rapidly reducing wholesale sales and increasing the proportion of direct-to-consumer sales through its own website. Direct sales amounted to $4.6 billion, accounting for 42% of total sales, a 17% increase compared to the same period last year.

However, Nike did not disclose earnings forecasts citing uncertainty. Matt Friend, Nike’s Chief Financial Officer (CFO), said during the earnings conference call, "We are focusing on what we can control," adding, "There are new issues creating higher levels of volatility."

Meanwhile, after the earnings announcement, Nike’s stock price rose nearly 6% in after-hours trading. Prior to the earnings release, Nike’s stock price had fallen more than 20% this year.

This content was produced with the assistance of AI translation services.