Nike posts flat sales growth, earnings drop

Nike reported fourth quarter revenues were 12.2 billion dollars, down 1 percent compared to prior year and up 3 percent on a currency-neutral basis.

Revenues for the Nike brand were 11.7 billion dollars, down 1 percent on a reported basis and up 3 percent on a currency-neutral basis, led by 20 percent growth in EMEA.

Revenues for Converse were 593 million dollars, down 1 percent on a reported basis and up 3 percent on a currency-neutral basis, due to wholesale revenue declines offset by growth in our direct to consumer business.

The company announced its board of directors has authorised a new four-year, 18 billion dollars program to repurchase shares of Nike's Class B common stock.

“Nike’s results this fiscal year are a testament to the unmatched strength of our brands and our deep connection with consumers," said John Donahoe, president and CEO, Nike, Inc.

Review of Nike’s fourth quarter results

Nike Direct reported revenues for the quarter were 4.8 billion dollars, up 7 percent compared to prior year and up 11 percent on a currency-neutral basis.

The company said, Nike Direct revenues growth was led by 25 percent growth in EMEA, 43 percent growth in APLA and 5 percent growth in North America, partially offset by a decline in Greater China.

Nike brand digital grew 15 percent on a reported basis and 18 percent on a currency-neutral basis, driven by double digit growth in APLA, North America and EMEA. NIKE-owned stores declined 2 percent on a reported basis and increased 1 percent on a currency-neutral basis.

Wholesale reported revenues were 6.8 billion dollars, down 7 percent compared to prior year and down 3 percent on a currency-neutral basis.

Gross margin for the quarter decreased 80 basis points to 45 percent, while diluted earnings per share was 90 cents for the fourth quarter, down 3 percent and net income was 1.4 billion dollars, down 5 percent.

In the fourth quarter, the company returned approximately 1.5 billion dollars to shareholders, including dividends of 481 million dollars, up 11 percent from prior year and share repurchases of 1.1 billion dollars, reflecting 8.5 million shares retired as part of the four-year, 15 billion dollars program approved by the board of directors in June 2018.

Nike’s fiscal 2022 income statement highlights

Full year revenues for Nike, Inc. increased 5 percent to 46.7 billion dollars, up 6 percent on a currency-neutral basis.

Revenues for the Nike brand were 44.4 billion dollars, up 5 percent on a reported basis and 6 percent on a currency-neutral basis, driven by double-digit growth in Nike Direct, partially offset by slight declines in wholesale revenues.

Nike Direct revenues were 18.7 billion dollars, up 14 percent on a reported basis and up 15 percent on a currency-neutral basis, led by Nike brand digital growth of 18 percent and Nike-owned stores were up 10 percent.

Revenues for Converse were 2.3 billion dollars, up 6 percent on a reported basis and up 7 percent on a currency-neutral basis, led by double-digit growth in our direct to consumer business, partially offset by lower wholesale revenues.

Gross margin increased 120 basis points to 46 percent, while net income was 6 billion dollars, up 6 percent, and diluted earnings per share were 3.75 dollars, up 5 percent compared to prior year.

In fiscal 2022, the company returned approximately 5.8 billion dollars to shareholders, including dividends of 1.8 billion dollars, up 12 percent from prior year and share repurchases of 4 billion dollars, reflecting 27.3 million shares retired. As of May 31, 2022, a total of 77.4 million shares for 8.7 billion dollars had been repurchased under the current program.