Persistent production and delivery bottlenecks have significantly slowed the growth rate of the US sporting goods company Nike Inc. in the past few months. Nevertheless, the company was able to exceed market expectations with its results for the second quarter of 2021/22 published on Monday evening. In the current interim report, Chief Financial Officer (CFO) Matt Friend also emphasized that the “short-term delivery difficulties” would not jeopardize the implementation of the long-term growth strategy.
In the months of September to November, consolidated sales amounted to 11.4 billion US dollars (10.1 billion euros). This was one percent above the level of the same quarter of the previous year. Adjusted for changes in exchange rates, revenues remained constant year-on-year. The core brand Nike came to 10.8 billion US dollars and thus grew by one percent (currency-adjusted +/- 0 percent), the smaller group label Converse increased its sales by 17 percent (currency-adjusted +16 percent) to 557 million US dollars .
The Nike brand sales developed very differently from region to region. The label posted strong growth in North America and the EMEA region, which includes Europe, the Middle East and Africa. There it was possible to satisfy the higher demand with products whose delivery had been delayed in the previous months, the company said. Sales in North America rose by 12 percent (currency-adjusted +12 percent) to 4.48 billion US dollars, in EMEA they grew by six percent (currency-adjusted +6 percent) to 3.14 billion US dollars.
Plant closings due to pandemics are causing significant sales losses in China
Things looked less positive in other important markets because there were not enough goods available due to Covid-19-related plant closings: In Greater China, Nike had to accept a sales decline of 20 percent (currency-adjusted -24 percent) to 1.84 billion US dollars . In the rest of the Asia-Pacific region and Latin America, total revenues were $ 1.35 billion. They were eight percent (currency-adjusted -6 percent) below the level of the same quarter of the previous year.
The group was also able to exceed expectations in terms of earnings. The gross margin grew from 43.1 to 45.9 percent because higher freight costs were more than offset by the restriction of price discounts. In addition, the tax burden was significantly lower than in the same quarter of the previous year. The net profit rose by seven percent to 1.34 billion US dollars (1.18 billion euros).
In the first six months of the current fiscal year, consolidated sales amounted to 23.6 billion US dollars, exceeding the corresponding prior-year level by eight percent. Net income grew 16 percent to $ 3.21 billion.