The sporting goods manufacturer did not meet the analysts’ expectations.
(Photo: Reuters)
Munich The world’s largest sporting goods manufacturer Nike has taken less momentum into the new financial year than expected. Sales in the first quarter of 2021/22 (as of the end of August) rose by twelve percent after adjustment for currency effects to $ 12.25 billion, as the big Adidas competitor announced on Thursday evening.
But analysts had expected an average of 12.46 billion. That caused the Nike share to crumble by three percent after the trading day. Compared to the record high of August, it has lost nine percent. Nike recorded the strongest sales growth in North America, this time China lagging behind.
Net profit rose 23 percent to $ 1.87 billion, as announced by Nike. At $ 1.16, earnings per share exceeded the $ 1.11 forecast by the analysts.
Above all, direct business through its own stores and websites has developed strongly, explained Nike. The American sporting goods giant generated 38 percent of its sales through these channels – called Nike Direct – with an increase of 25 percent after adjusting for currency effects compared to the first quarter of the previous year. The customers poured into the shops that were closed due to the corona pandemic. Nike spoke of a “normalization” of stationary retail, in which sales were above the level of two years ago, i.e. before the pandemic.
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The focus on direct business also has a positive effect on the gross margin, which improved by 1.7 percentage points to 46.5 percent. The company said that Nike had to cope with higher freight costs.
The shaky supply chains in the pandemic have made shipping freight from Asia significantly more expensive, from where sporting goods manufacturers around the world purchase shoes and clothing. In Vietnam, where Nike has almost half of all shoes made, the factories were closed for months due to Corona. Some analysts fear that the group could run out of goods in the pre-Christmas season.
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