Summary
NIKE, Inc. reported a solid performance for the third quarter of fiscal year 2022, with revenues increasing by 5% year-over-year to $10.9 billion, or 8% on a currency-neutral basis. This growth was driven by strong momentum in the NIKE Direct business, which saw a 17% increase (currency-neutral), and broad-based strength across North America, EMEA, and APLA, partially offset by a decline in Greater China due to COVID-19 resurgence and marketplace dynamics. Despite revenue growth, net income saw a slight decrease of 4% to $1.4 billion, resulting in diluted EPS of $0.87, down from $0.90 in the prior year. This was impacted by higher selling and administrative expenses, including increased demand creation and operating overhead, as well as a higher effective tax rate. However, gross margin improved by 100 basis points year-over-year, benefiting from lower promotional activity in the NIKE Direct business and favorable foreign currency impacts, though partially offset by higher product and logistics costs. The company continues to navigate supply chain challenges, expecting them to persist and impact product availability and costs. Investors should note the continued strategic shift towards NIKE Direct, which now represents 44% of NIKE Brand revenues in the quarter, highlighting the company's focus on direct consumer relationships and digital transformation. Management is managing persistent supply chain disruptions and elevated costs by implementing operational playbooks, strategic pricing, and a seasonless product approach, while remaining committed to long-term fiscal 2025 financial goals.
Financial Highlights
49 data points| Revenue | $10.87B |
| Cost of Revenue | $5.80B |
| Gross Profit | $5.07B |
| SG&A Expenses | $3.44B |
| Net Income | $1.40B |
| EPS (Basic) | $0.88 |
| EPS (Diluted) | $0.87 |
| Shares Outstanding (Basic) | 1.58B |
| Shares Outstanding (Diluted) | 1.61B |
Key Highlights
- 1Revenues grew 5% to $10.9 billion, or 8% on a currency-neutral basis, driven by NIKE Direct and strong performance in North America, EMEA, and APLA.
- 2Net income decreased 4% to $1.4 billion, resulting in diluted EPS of $0.87.
- 3Gross margin improved by 100 basis points to 46.6%, driven by lower promotions in NIKE Direct and favorable currency impacts.
- 4NIKE Direct business showed strong momentum, increasing 17% on a currency-neutral basis and representing 44% of NIKE Brand revenues.
- 5Greater China revenues declined 5% (8% currency-neutral) due to COVID-19 resurgence and marketplace dynamics.
- 6Selling and administrative expenses increased 13% due to higher demand creation and operating overhead investments.
- 7The company continues to experience supply chain challenges impacting product availability and costs.