Nike shares fell by 4% after weak report and management forecasts

Акции nike упали на 4% после слабого отчета и прогнозов руководства

Sportswear & accessories manufacturer Nike releases first quarter fiscal year 2022 report. Comparing with the previous year:

  • revenue increased by 16%, up to $ 12.2 billion;
  • gross profit increased by 20%, up to 5.7 billion;
  • net profit increased by 23%, up to 1.9 billion.

Nike retail sales rose by 28%, up to 4.7 billion. The company said, that physical stores are up and running, and total store sales have exceeded the level of two years ago.

Online sales have increased 29%. Nike continues to develop digital sales channel, who helped the company out during quarantine. According to management plans, by 2025 digital sales will be 40% from all proceeds.

In North America, in Nike's largest market, revenue increased by 15%. In Europe - on 14%, in Asia and Latin America - by 33%. In China, where Nike sales have grown the fastest until recently, revenue grew only by 11%. And excluding the exchange rate difference, it is even less - by 1%.

Total and North American revenues were lower, what analysts expected. After the report, Nike shares fell by 4%, to 153,3 $.

As explained in the company, demand for Nike products remains high, but there was a shortage due to supply disruptions. About 50% shoes and 30% Nike manufactures clothing in Vietnam. More than half of Vietnamese factories due to the pandemic, with whom the company works, remain closed. According to Nike forecasts, it will take several months, to restore production.

Manufacturing problems compounded by delivery delays. According to Nike management, delivery time for goods from Asia to North America doubled, on average almost three months.

Due to disruptions, the company changed its forecast for the 2022 fiscal year. As Nike now believes, sales will not grow double-digit throughout the year, but only a few percent. Analysts hoped for growth in 12% based on the results of the second quarter and the whole year.

Nike stock has increased since the beginning of the year 14%, but fell already on 8% from the maximum in August, when the first talk about production problems appeared.

Акции nike упали на 4% после слабого отчета и прогнозов руководства

Share of manufacturing companies in Vietnam

Deckers Outdoor (DECK)50%+
Capri Holdings (CPRI)45-50%
Columbia Sportswear (COLM)45%+
Nike (NKE)43%
Tapestry (TPR)40-50%
Under Armour (UAA)40%
Lululemon (LULU)33%
VF Corp. (VFC)25%
LoveSac (LOVE)20-25%
Yeti Holdings (YETI)20%
Steve Madden (SHOO)
Scroll up