Nike Inc. Fiscal Earnings Report (Q1 2022)

Nike Inc. has released their fiscal report for Q1 2022, narrowly missing analyst expectations due to supply chain issues.
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On September 23, 2021, Nike Inc. announced its earnings report for the fiscal first quarter of 2022, ending August 31, 2021. Here are the main findings from the report.

Revenue for Nike Inc. narrowly missed estimates. Analysts projected revenue was $12.46bn; Nike reported revenue to be $12.2bn. This was attributable to the fact that demand for Nike products in North America had waned. However, more products at full price were sold than usual, increasing revenue generation.

Sales via Nike Direct came in at $4.7bn, up 28%, while Nike Brand Digital sales increased 29% as the company has been making more investments into its shopping app and websites, with many flocking to online shopping as the Delta variant is still a concern for public health. Chief Financial Officer, Mike Friend, said:

“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…”

Earnings per share came in at $1.16, beating analysts estimates of $1.11.

Nike also expressed concerns over supply chain issues in their report that was severely disrupting their production volumes. Since July, Nike has been shutting down many of its production facilities in Vietnam, as the Vietnamese government continues to implement harsh COVID-19 restrictions on the country, halting economic activity. Nike’s facilities in Vietnam account for approximately half of its entire footwear production and around a third of its clothing and apparel production. Friend said that:

“We’ve already lost 10 weeks of production, and that gap will continue. … It’s going to take several months to ramp back to full production…”

After the report was released, shares of Nike Inc. fell around $10 (more than 6.5%), and now currently trades around $149.59 per share before the market re-opens on September 27.

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