The US sporting goods provider Nike Inc. was only able to increase its sales in the second quarter of the 2023/24 financial year due to currency effects. However, the profit was significantly higher than in the same period last year, the company said on Thursday evening. In order to further improve profitability, Nike now wants to initiate an extensive savings program.
In the three months before November 30, group sales amounted to 13.4 billion US dollars (12.2 billion euros), exceeding the level of the previous year’s quarter by one percent. However, adjusted for exchange rate changes, revenue fell by one percent. The core brand Nike increased its sales by one percent to 12.9 billion US dollars, the Converse label suffered a decline of eleven percent (-13 percent adjusted for currency effects) to 519 million US dollars.
Weak demand in North America is slowing sales growth
The sales development of the Nike brand was slowed by weaker demand in North America. Their revenue there fell by four percent (-3 percent adjusted for currency effects) to 5.6 billion US dollars. In the EMEA region, which includes Europe, the Middle East and Africa, sales increased by two percent (-3 percent at constant currencies) to 3.6 billion US dollars; in Greater China they increased by four percent (+8 percent at constant currencies). ) to $1.9 billion. In the Asia-Pacific region and Latin America, revenues totaled $1.8 billion, exceeding the previous year’s level by 13 percent (+10 percent adjusted for currency effects).
Because the gross margin rose from 42.9 to 44.6 percent due to lower freight costs and a changed pricing policy, the group was able to significantly improve its results. Net profit grew by 19 percent compared to the same quarter last year and reached almost 1.6 billion US dollars (1.4 billion euros).
Nike wants to save up to two billion US dollars
The group wants to further improve its profitability in the future through comprehensive cost-cutting measures. The company said options are currently being examined to reduce costs by a total of up to $2 billion over the next three years. The goals are to “simplify the product range, increase automation and the use of technology and streamline the organizational structure”.
The planned structural reform is expected to result in one-off charges of between $400 and $450 million due to job cuts, which are expected to be recorded in the third quarter.