On Tuesday, Nike announced its third-quarter fiscal 2023 financial results, which showed that revenue increased while net income decreased.
To $12.39 billion, the athletic footwear and apparel company’s third-quarter revenues increased by approximately 14% year over year. For the exact same three months in the previous year, the business reported revenue of $10.87 billion.
In prepared remarks that Nike published, CFO Matthew Friend stated that the company “drove strong holiday sales with momentum continuing into the new calendar year” in North America, where revenue for the quarter increased by 27%.
Europe, the Middle East, Africa, the Asian-Pacific region, and Latin America were additional regions that experienced growth. On the other hand, revenue decreased by a single digit in the Greater China region.
Nike’s third-quarter net income increased to $1.24 billion from $1.40 billion in fiscal 2022, with diluted earnings per common share of $0.79. The weakened EPS figure denoted a 9% drop year over year.
Both diluted EPS and revenue exceeded analyst expectations.
Nike claimed a gross margin of 43.3 percent. The company attributed the 330 basis point decrease in the quarter to “higher markdowns to liquidate inventory; continued unfavorable changes in net foreign currency exchange rates; higher product input costs and elevated freight and logistics costs,” according to its earnings release.
The athletic footwear and apparel company reported an inventory of $8.9 billion this year, up from $7.7 billion in the third quarter of last year. Nike has “made tremendous progress on inventory as we position Nike for sustainable and more profitable growth,” according to Friend in the earnings release.
“Fueled by compelling product innovation, deep relationships with consumers and a digital advantage that fuels brand momentum, our proven playbook allows us to navigate volatility as we create value and drive long-term growth,” CEO John Donahoe said.
In its earnings release, the company also talked about how much sales of Nike Direct and Nike Brand Digital have grown.