Nike Posts Year-On-Year Revenue Growth in Third Quarter, Net Income Decline

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Nike on Tuesday released financial results for the third quarter of fiscal 2023 that showed rising sales and falling net income.

The company’s athletic footwear and apparel revenue rose about 14% year over year in the third quarter to $12.39 billion. The company reported revenue of $10.87 billion for the same three-month period last year.

Nike released its financial results for the third quarter. (iStock / iStock)

CFO Matthew Friend, in prepared notes released by Nike, said that in North America, where quarterly sales rose 27%, the company “driven strong holiday sales with continued momentum into the new calendar year.”

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Other growth regions were Europe, the Middle East, Africa, the Asia-Pacific region and Latin America. The Greater China region, on the other hand, recorded a single-digit decline in sales.

Nike’s net income for the third quarter increased to $1.24 billion from $1.40 billion in fiscal 2022, with diluted earnings per common share of $0.79. Diluted EPS declined 9% year over year.

The Nike logo is displayed on a window in a Nike store on March 21, 2019 in San Francisco. (Justin Sullivan/Getty Images/Getty Images)

Revenue and diluted earnings per share both came in above analyst forecasts, according to The Associated Press.

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Nike said gross margin was 43.3%. For the quarter’s decline of 330 basis points, the company attributed “higher discounts to liquidate inventory,” according to its earnings release; persistent unfavorable changes in net exchange rates; higher product input costs and increased freight and logistics costs”.

A customer is reflected in a shop window decorated with the Nike logo at Belaya Dacha outlet village outside Moscow, Russia, April 23, 2016. (Portal/Grigory Dukor / Portal)

The company’s athletic footwear and apparel inventories rose by double digits to $8.9 billion this year from $7.7 billion reported in the third quarter last year. Friend said in the earnings release that Nike has “made tremendous progress on inventory levels as we position Nike for sustained and more profitable growth.”

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“Driven by compelling product innovation, deep relationships with consumers and a digital advantage that fuels brand momentum, our proven playbook allows us to manage volatility while creating value and driving long-term growth,” said CEO John Donahoe.

The company also announced sales growth from Nike Direct and Nike Brand Digital in its earnings release.