Core Highlights: - Net income decreased 27.5% to $1,051 million compared to the prior year
- Gross margin increased 120 basis points to 45.4%
- Revenues decreased 10% to $11,589 million
Revenue Breakdown: Nike Brand:
- Footwear revenue decreased 10% on a currency-neutral basis. Units down 10%, ASP flat.
- Apparel revenue decreased 9% on a currency-neutral basis. Units down 12%, ASP up 3%.
- Nike Brand wholesale revenue down 7% on a currency-neutral basis.
- Nike Direct revenue down 12% on a currency-neutral basis, driven by digital sales decline of 20%.
Converse:
- Revenue down 14% on a currency-neutral basis, driven by declines across all territories.
- Wholesale revenue down 16%, direct-to-consumer down 15%.
Management Outlook: Management cited profitability was impacted by higher discounts amid elevated inventory levels. Near-term outlook remains challenging due to inflationary pressures.
Operating Data: - Cash and equivalents of $8.5 billion, net decrease of $1.6 billion from prior quarter
- Inventories increased 9.7% to $8.3 billion
- Current cash could support operations for approximately 16 quarters under current loss conditions
Operational Risks: - Currency exchange rate fluctuations, stronger U.S. dollar
- Rising product costs and freight expenses reducing margins
- Geopolitical tensions and economic uncertainty in Greater China
- Supply chain disruptions impacting product availability
Original Filing