The sneaker-giant reported an EPS of $1.16, topping the $1.11 expected. However, its $12.25 billion revenue came in lower than $12.46 billion anticipated, as demand in North America weakened. However, according to Nike, the global market for its shoes and workout apparel remains strong.
Geographically, revenue in North America surged 15% to $4.88 billion, coming in short of the $5.05 billion touted by analysts. China posted the smallest gain, climbing 11%, after, in past quarters, the region has been one of Nike’s most significant revenue drivers.
Digital sales rose 29% year over year, as the brand has invested in its website and a suite of mobile apps.
Because of the mixed Q1 2022 earnings report and the supply chain congestion, Nike revised its forecast. Over the next few quarters, Nike expects the entire business to see short-term inventory shortages.
Besides the quarterly figures, Nike announced partnering up with Roblox to create a virtual world named Nikeland. The virtual world will include Nike buildings, fields, and arenas for players to compete in various mini games. Nikeland is modelled after the company’s Oregon headquarters. For now, Nikeland will be available for free. They plan to integrate in-play moments that emulate global sporting events, such as a soccer event during the World Cup or a flag football game during the Super Bowl. Also, users will enter a digital showroom to dress their avatar and check Nike’s latest product offerings.
This is not the first time when Nike is tackling the tech world or the metaverse. The company paired with Roblox in 2019 for Nike Air Max Day. Moreover, the transition to digital has been the central point for Nike as consumer habits change. According to CFO Matt Friend: “Digital is increasingly becoming a part of everyone’s shopping journey, and we are well-positioned to reach our vision of a 40%-owned digital business by fiscal 2025.”
As of Thursday’s closing bell, Nike shares are up about 13% year to date.
Source: cnbc.com, thestreet.com