Nike reported lower quarterly profits Thursday on increased logistics spending and a hit from product markdowns, as it pivots in a fast-changing consumer market challenged by inflation.
The sports giant topped analyst estimates for both earnings per share and revenues, but shares fell sharply as it faced questions over excess inventory in North America and signaled the strengthening dollar would dent results.
Nike expects a $4 billion hit from the stronger dollar in its current fiscal year, said Chief Financial Officer Matthew Friend on a conference call over its fiscal 2023 first quarter results.
Profit for the quarter ending August 31 was $1.5 billion, down 22 per cent but translating into earnings per share that exceeded expectations. Revenues rose four per cent to $12.7 billion.
While sales once again fell in Greater China, a market hard hit by Covid-19 restrictions, Nike notched higher sales in its other three regions, including North America, where revenues jumped 13 per cent. But the company is facing a much more promotional environment in its home market, where other retailers are offering deals as consumers respond to costlier gasoline, groceries and other household items.