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Nike said revenue rose to $12.9 billion in the first quarter of fiscal 2024, up 2 per cent year-on-year, missing analyst expectations for the first time in two years. Despite this, shares were up 8 per cent after markets closed on Thursday.
Revenues for the Nike brand were $12.4 billion, up 3 per cent year-on-year. Sales at sneaker brand Converse fell 9 per cent year-on-year to $588 million.
Revenues in North America (Nike’s largest market) revenues were down 2 per cent year-on-year to $5.4 million. Nike is the latest in a line of companies reporting slower growth, or revenue dips, in the region, thanks to ongoing consumer ambivalence due to heightened inflation. This was in line with expectations, CFO Matthew Friend noted, due to higher product costs and unfavourable changes in net foreign currency exchange rates. Nike aimed to offset this with strategic pricing actions, Friend added.
EMEA, China and APAC, on the other hand, all saw positive growth. EMEA revenues were up 8 per cent to $3.6 million; China revenues were up 5 per cent to 1.7 million; and APAC revenues were up 2 per cent to $1.6 million.
“As the global authentic market leader, our scale and portfolio allow us to create an impact that only Nike can,” CEO John Donahoe told investors on Thursday afternoon. “Over the past few years, we've navigated through an unprecedented external environment. We've worked through many challenges: societal, geopolitical, global health, supply chain and more. During this time, Nike has grown larger and stronger.” Donahoe highlighted Nike’s growing lifestyle product category in response to consumer demand; the development of its basketball and football franchises; and its growing digital capabilities.
Nike and Martine Rose’s third collaboration, which dropped in July, was a popular shoe choice during fashion month.
I'm an expert in the field of business and fashion, with a comprehensive understanding of market trends, financial dynamics, and the intricacies of major global brands. My expertise extends to companies like Nike, a powerhouse in the athletic and lifestyle apparel industry. Allow me to provide insights into the recent developments mentioned in the article.
The article discusses Nike's financial performance in the first quarter of fiscal 2024, revealing that its revenue reached $12.9 billion, marking a 2% year-on-year increase. Despite this positive growth, it's noteworthy that the figure fell short of analyst expectations for the first time in two years. Interestingly, the stock market responded positively, with Nike's shares experiencing an 8% increase after markets closed on Thursday.
Breaking down the revenue, the Nike brand accounted for $12.4 billion, indicating a 3% year-on-year increase. However, Converse, a subsidiary sneaker brand, faced a decline of 9%, with revenues dropping to $588 million.
One key factor influencing Nike's performance is the regional breakdown of revenues. In North America, Nike's largest market, revenues were down 2% year-on-year to $5.4 million. This decline aligns with a broader trend seen in other companies, reflecting slower growth or revenue dips in the region. The article attributes this to consumer ambivalence driven by heightened inflation. The Chief Financial Officer, Matthew Friend, noted that this was in line with expectations, citing higher product costs and unfavorable changes in net foreign currency exchange rates. Nike's response to these challenges involves strategic pricing actions aimed at offsetting the impact.
On a more positive note, other regions such as EMEA (Europe, Middle East, and Africa), China, and APAC (Asia-Pacific) experienced growth. EMEA revenues increased by 8% to $3.6 million, China revenues were up 5% to $1.7 million, and APAC revenues grew by 2% to $1.6 million.
Nike's CEO, John Donahoe, positioned the company as a global authentic market leader with the ability to create a unique impact. Despite facing various challenges, including societal, geopolitical, global health, and supply chain issues, Donahoe emphasized Nike's growth and strength. He highlighted the company's response to consumer demand through the expansion of lifestyle products, the development of basketball and football franchises, and the enhancement of digital capabilities.
The article also briefly mentions a collaboration between Nike and Martine Rose, which evidently gained popularity, particularly during fashion month in July.
In summary, Nike's financial performance reflects a mixed picture with overall revenue growth, but a deviation from analyst expectations. Regional variations and strategic responses to challenges underscore the complex landscape that major global brands navigate in today's dynamic business environment.
