CM – Nike misses first quarter sales estimates, stocks fall

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Nike Inc. reported results for the first quarter of 2022 that fell short of analysts’ expectations on the revenue side.

Overall, the sports giant reported growth of $ 12.2 billion in revenue on Thursday for the Quarter, an increase of 16% over the previous year. However, that fell short of estimates of $ 12.46 billion in sales from an analyst survey. Net income was $ 1.9 billion, up 23% year over year, with diluted earnings per share increasing 22% to $ 1.16, versus an expected $ 1.11 / p> Nike shares fell in expanded trading Thursday, down about 3% in the hour after earnings were posted.

Nike’s direct sales were $ 4.7 billion, up 28 % on a reported basis and an increase of 25% on a currency-neutral basis.

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According to data from Placer.ai, pedestrian traffic in Nike stores did not exceed pre-pandemic levels in June, July and August in 2019. However, visits to Nike stores increased 39.6% in August compared to July and 22.1% in the week of September 6 compared to the same period in 2019.

« The strong results of Nike this quarter is ongoing evidence of our deep customer relationships, relentless innovation pipeline and a digital advantage that drives our brand momentum, « said John Donahoe, President and CEO of Nike. « We have the right playbook to manage macro dynamics as we create value through our relentless drive to advance the future of the sport. » Factory closures in Vietnam, the United States’ second largest shoe supplier after China, would be adversely affected. Factories in the region have been closed since July due to COVID-19-related issues, market observers noted. The nine-week closures are particularly problematic for athletic shoe and apparel brands that rely on suppliers in the region Vietnam more. Vietnam accounted for 51% of Nike’s shoe and 30% of clothing units last year. In light of recent supply chain issues, BTIG downgraded Nike from “Buy” to “Neutral” prior to its earnings call.

“While NKE is typically incredibly well equipped to deal with such disruptions, we fear the same problem will arise for even the best-managed sports brand the world is simply too big, ”wrote Camilo Lyon, lifestyle and wellness analyst at BTIG. « So we’re downgrading to neutral until there’s better visibility into the schedules for a return to normalized production and shipping schedules. » citing the production stop in Vietnam due to the pandemic.

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