Summary
NIKE, Inc.'s third quarter fiscal year 2023 results, filed on April 6, 2023, show a 14% increase in revenues to $12.4 billion compared to the prior year, driven by strong demand across all geographies, particularly North America and Europe, Middle East & Africa. This growth was achieved despite ongoing macroeconomic volatility and supply chain challenges, with revenue increasing by 19% on a currency-neutral basis. Diluted earnings per share decreased to $0.79 from $0.87 in the prior year, reflecting a decrease in net income due to higher selling and administrative expenses and a contraction in gross margin. The company reported a significant increase in inventory levels earlier in the fiscal year due to improved transit times, but has since taken actions to reduce excess inventory through decreased purchases and increased promotions. This strategy is expected to normalize inventory levels by the end of fiscal 2023. Gross margin was impacted by higher product input, freight, and logistics costs, as well as increased promotional activity, which were partially offset by strategic pricing actions and higher full-price average selling prices. Foreign currency headwinds also presented a challenge, reducing reported revenues. NIKE continues to focus on its Consumer Direct Acceleration strategy, emphasizing digital channels and owned retail stores, with NIKE Direct revenues representing approximately 45% of total NIKE Brand revenues for the quarter. The company repurchased approximately $4.1 billion of its common stock during the first nine months of the fiscal year, underscoring its commitment to returning capital to shareholders. Looking ahead, NIKE anticipates continued promotional activity and elevated product costs, suggesting potential for further gross margin contraction in the near term.
Financial Highlights
47 data points| Revenue | $12.39B |
| Cost of Revenue | $7.02B |
| Gross Profit | $5.37B |
| SG&A Expenses | $3.96B |
| Net Income | $1.24B |
| EPS (Basic) | $0.80 |
| EPS (Diluted) | $0.79 |
| Shares Outstanding (Basic) | 1.54B |
| Shares Outstanding (Diluted) | 1.56B |
Key Highlights
- 1Revenues increased 14% year-over-year to $12.4 billion for the third quarter of fiscal 2023, with a 19% increase on a currency-neutral basis.
- 2Diluted earnings per share decreased to $0.79 from $0.87 in the prior year's third quarter, reflecting lower net income.
- 3Gross margin contracted by 330 basis points to 43.3% in the third quarter, impacted by higher product costs and promotional activity, partially offset by strategic pricing.
- 4Total selling and administrative expenses increased by 15% in the third quarter, driven by higher demand creation and operating overhead expenses.
- 5NIKE Direct revenues represented approximately 45% of total NIKE Brand revenues, with digital sales up 24% currency-neutral.
- 6Inventory levels decreased sequentially in the second and third quarters of fiscal 2023 due to actions taken to reduce excess inventory.
- 7The company repurchased approximately $4.1 billion of common stock in the first nine months of fiscal 2023.