Nike shares soared after the company projected that revenue this fiscal year will surpass $50 billion for the first time, benefiting from rebounding growth in North America.
The company is forecasting low double-digit sales growth in the current year, ending next May, executives said Thursday on a conference call after reporting better-than-expected fiscal fourth-quarter results. Growth will be faster in the first half as consumer interest revives.
Nike is gaining momentum as sports leagues and events resume in the US and Europe reopens for business, driving renewed demand for its sneakers and apparel. Wall Street was forecasting sales of $48.6bn for fiscal 2022.
The athleticwear maker posted sales growth across its regions last quarter, boosted by record revenue in North America. Global sales almost doubled to $12.3bn in the period ended May 31, the company said in a statement. That beat analysts’ expectations.
Shares of the Beaverton, Oregon-based apparel and footwear company jumped as much as 13 per cent to $151 in trading on Friday before US markets opened, an all-time high. The stock was down 5.6 per cent this year through Thursday’s close in New York. Rival Adidas gained as much as 5.8 per cent in Germany.
Several analysts increased their price targets on the stock, noting the company’s impressive multiyear targets.
The growth in sales isn’t just a sign the company has moved past pandemic challenges. Chief executive John Donahoe is also pushing to radically cut down on wholesale distribution by eliminating many of its retail partners in favour of more lucrative direct-to-consumer sales. That’s led to a rise in sales for the Nike Direct division, which spiked 73 per cent in the latest quarter. It has also ushered in improved margins.
“We are building a new financial model that will continue to fuel long-term sustainable, profitable growth,” Matt Friend, Nike’s chief financial officer, said in the statement.
North America had previously been a problematic market for Nike, hindered by supply-chain issues that kept products from reaching consumers. Some of those delayed shipments were bumped into this quarter, aiding wholesale revenue as US states eased virus-related restrictions and many sporting events returned in full.
At the same time, Nike’s sales growth in Greater China, which had until recently led the company’s revival, is starting to cool off. Revenue climbed just 17 per cent and less when excluding currency swings to $1.93bn, missing analysts’ expectations of $2.25bn. The results may reflect the impact of boycotts of Nike and other brands over corporate statements on forced labour related to cotton production in the Xinjiang region.
The company forecasts growth in the low to mid-teens in China over the long term.
Meanwhile, store closures persisted in Europe, the Middle East and Africa throughout the period. But Nike has been able to reopen almost its entire network, with 99 per cent of stores in the region now fully operational or open with reduced hours.
West Indies v India - Third ODI
India 251-4 (50 overs)
Dhoni (78*), Rahane (72), Jadhav (40)
Cummins (2-56), Bishoo (1-38)
West Indies 158 (38.1 overs)
Mohammed (40), Powell (30), Hope (24)
Ashwin (3-28), Yadav (3-41), Pandya (2-32)
India won by 93 runs
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UAE currency: the story behind the money in your pockets
More from Rashmee Roshan Lall
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
How to help
Send “thenational” to the following numbers or call the hotline on: 0502955999
2289 – Dh10
2252 – Dh 50
6025 – Dh20
6027 – Dh 100
6026 – Dh 200
The BIO
Favourite piece of music: Verdi’s Requiem. It’s awe-inspiring.
Biggest inspiration: My father, as I grew up in a house where music was constantly played on a wind-up gramophone. I had amazing music teachers in primary and secondary school who inspired me to take my music further. They encouraged me to take up music as a profession and I follow in their footsteps, encouraging others to do the same.
Favourite book: Ian McEwan’s Atonement – the ending alone knocked me for six.
Favourite holiday destination: Italy - music and opera is so much part of the life there. I love it.
Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
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