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Nike'S Revenue In The Second Quarter Of The Fiscal Year Was $13.3 Billion

2022/12/24 6:06:00 1


On December 21, Nike disclosed its performance in the second quarter of fiscal year 2023 as of November 30, 2022. Nike's revenue in the second quarter was about $13.315 billion, up 17% year on year, higher than the $12.6 billion expected by analysts. The net profit was about 1.331 billion US dollars, close to 1.337 billion US dollars in the same period last year.
Nike's direct sales in this quarter increased by 16% month on month to $5.4 billion, and its digital sales increased by 25% month on month. In the past few quarters, wholesale revenue was basically flat, but this quarter increased by 19%.
Matt Friend, Nike's chief financial officer, pointed out on the conference call that the company carried out large-scale promotional activities this quarter, and the sales momentum of the holiday season continued until the first few weeks of December.
In terms of regions, Nike's revenue in its headquarters in North America increased by 30% to US $5.83 billion year on year. In Europe, the Middle East and Africa, Nike recorded a revenue of US $3.489 billion, an increase of 11% year on year, and an increase of 33% regardless of the impact of exchange rate.
As the third largest market of Nike, the total revenue of Greater China in the quarter was $1.788 billion, lower than analysts' expectations, with a year-on-year decline of 3%, and an increase of 6% without considering the impact of exchange rate.
Nike's revenue by region in the second quarter of fiscal year 2023
Nike said that its product demand in China has increased. Bloomberg reported that Nike executives said that they were paying close attention to the market situation as the Chinese government optimized and adjusted the epidemic prevention and control measures.
Reuters quoted Morningstar analyst David Swartz as saying that Nike's business in Greater China is still weak, but in recent weeks it is showing signs of recovery. "This is very good for Nike," said David Swartz.
In the quarter, Nike's gross profit margin fell 3% to 42.9%. Nike said that it was mainly due to a larger price reduction to clear inventory, especially in the North American market. In addition, the exchange rate is also a major disadvantage, coupled with high freight and logistics costs and rising product input costs. The pricing strategy partially offset these factors squeezing the gross profit margin. Nevertheless, Nike's gross profit margin still exceeded analysts' expectations.
According to Bloomberg, Nike executives said that inventory in this quarter increased by 43% year on year, but this figure was exaggerated. Last year, Vietnam's factories were affected by the epidemic and the long shipping time disrupted the retail business around the country, so the inventory level in the same period last year was abnormally low.
Looking forward to the 2023 fiscal year, Nike expects that, without considering the impact of exchange rate, the annual revenue will grow in low double digits (can be understood as 10% to 15%), and Nike maintains the prediction that the annual gross margin will decline by 2% to 2.5%.

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