Nike Posted surprising sales growth in his financial first quarter on Tuesday, but sneakers are still working further to execute their changes.
The company said that revenue increased by 1% in the three months ending August 31, earlier saying that it would fall by mid–point percentage during the anticipated sales period.
Nevertheless, Nike’s profits fell 31%, while gross margin declined by 3.2% points to 42.2% during the quarter – a warning for investors that efforts to clarify through old inventory are still on.
In a press release, Finance Head Matt Mitra warned that “progress would not be linear.”
The friend said, “I am encouraged by the speed generated in the quarters, but progress will not be linear because the dimensions of our business are cured on different deadlines.” “When we navigate many external headwinds, our teams focus on executing against what we can control.”
According to unanimous estimates from LSEG, how Nike performed during the quarter compared to Wall Street:
- earnings per share: 49 cents are expected of 27 cents
- Income: $ 11.72 billion vs $ 11.0 billion is expected
Nike reported for this period was $ 727 million, or 49 cents per share, which was in the year-first quarter, compared to $ 1.05 billion or 70 cents per share.
Sales grew by about 1% to $ 11.72 billion from $ 11.59 billion a year ago.
In a statement, CEO Elliot Hill said that the company is progressing in three major areas: wholesale, running and North America. According to the Strikunt, during the quarter, the wholesale revenue increased from 7.8 billion to $ 7.8 billion, while sales in North America were 4% at 4% – analysts of $ 4.55 billion were expected.
However, beyond those three regions, Hill admitted that some parts of the business were still struggling.
“When we are winning under our belt, we still work further to achieve sports, geography and channels on a similar path, as we manage a dynamic operating environment,” Hill said.
During the quarter, the sale of Nike Direct fell 4% to about 4.5 billion dollars. Revenue in China – One of the company’s most important markets was – 9%below.
Since Hill took over about a year ago, he is working to bring Nike back into development and undoing some work that implements his predecessor John Doahno. One of the most important parts of that strategy is rule Nike innovation engine And clearing through stale inventory to make way for new styles.
However, this strategy is important for Nike to grow and take back efforts market shareIt comes with pain in short -term. To clean the old inventory, Nike needs to really rely on discounts and less profitable sales channels to move products, affecting its profitability.
During the quarter, the invention was 2% below compared to the previous year with a decrease in units, which was related to the increase in product costs. High tariff.
Beyond the release of Nike, investors were looking for any clue about how those efforts are going on and how long will they take. The company was expecting more insight into its progress during a conference call with analysts on ET at 5 pm.
Beyond the inventory management, Hill has promised to rebuild the corporate structure of Nike, so it will once again be the segment teams by sports instead of women, men and children. In late August, the company began to reshuffle the teams. As part of restructuring, Nike said it would be Cut about 1% of your employeesAnd most employees will be taken to new roles on 21 September.
Hill has said that focusing on the game on lifestyle will help the company win back to its important athlete consumer, but lifestyle merchandise is still an important part of the strategy as it allows Nike to reach a large consumer section, and more women. The number of female customers has been another important part of Hill’s strategy and Nike’s recent partnership with Kim Kardashian’s Shapewear Brand Schemes is one of the ways from there.
Nikeskims, originally slated to release in the spring, was officially launched last week. Investors will be looking for color how the new brand is performing and how it can affect sales.
This story is developing. Please check back for updates.
