Despite all the difficulties, the sportswear manufacturer is reporting profit growth and is optimistic about the future.
In the first quarter of the current financial year, revenue Nike amounted to 10.6 billion dollars. This is notably up from $6.3 billion in the fourth quarter of last fiscal year. And only 1% lower than in the first quarter of last year. At the same time, profit growth was shown not only by the main brand, but also by other trademarks of the company. For example, indicators Converse rose by 2% to $563 million.
Results like these led CEO John Donahue to boast on a conference call with analysts that, "No company can come out of this period better than Nike." Indeed, at a time when the retail industry is suffering significant losses due to the coronavirus pandemic, making high profits is a very good result.
A large part of the growth was driven by online sales, which increased immediately by 82%, while Nike's wholesale and brick-and-mortar sales remain lower than usual. The company is confident that digital commerce will continue to develop rapidly. Digital brought in nearly $900M in additional revenue over last year and has already met the 30% target, which was originally expected to be three years away.
However, retail traffic is still declining and the retailer still has to deal with excess inventory. This quarter, inventories were up 15% over the previous year but down 9% over the previous quarter. Also, advertising costs have increased, and supply chain difficulties have appeared.
In other words, the situation is still far from ideal. However, in general, the company published results that were out of reach for many other brands. At a time when many companies are forced to carry out mass layoffs or even declare themselves bankrupt, such achievements look more than good.