Nike is continuing to grow its direct sales to customers while selling slightly less to wholesalers, the company has shown in third-quarter results.
Nike Inc has reported revenues of $10.9bn (£8.2bn) for the quarter to February 28 2022. That’s 5% up on the same time last year. Within that, revenues for the Nike brand were $10.3bn (£7.8bn), 8% up on the previous year on a like-for-like basis. Revenues at Converse came in at $567m (£427.8m), down 1% on last time, with strong performances in North America and Europe but declines in Asia. Net income of $1.4bn (£1.1bn) was 4% down on last time.
The group’s direct-to-consumer sales came in at $4.6bn (£3.5bn) – up by 15% on last year. That includes a 14% rise in sales in Nike’s owned stores. At the same time, its digital Nike brand sales grew by 19% – with digital sales in the US alone up by 33%, and by double digits in Europe, although this was offset by declining sales in greater China.
“Nike’s strong results this quarter show that our Consumer Direct Acceleration strategy is working as we invest to achieve our growth opportunities,” says John Donahoe, president and chief executive of Nike Inc. “Fuelled by deep consumer connections, compelling product innovation and an expanding digital advantage, we have the right playbook to navigate volatility and create value through our relentless drive to serve the future of sport.”
While direct-to-consumer sales grew, wholesale declined by 1%. Nike says that demand continues to outstrip supply.
Matt Friend, executive vice president and chief financial officer at Nike, says: “Our third quarter results demonstrate Nike’s ability to navigate through volatility, while continuing to serve consumers directly and digitally, at scale. Marketplace demand continues to significantly exceed available inventory supply, with a healthy pull market across our geographies.”
Commenting on the figures, Emily Salter, senior apparel analyst at GlobalData, says Nike’s push for direct-to-consumer dominance is continuing, with sales rising in its stores. “As the brand continues to reduce its wholesale presence, recently ending its partnerships with the likes of Footlocker, Very, and DSW, wholesale revenues underperformed the total business, only rising by a muted 1%,” she says. “These withdrawals will hit the affected retailers hard, but will help solidify shopper loyalty and product exclusivity at Nike, and proves the brand’s confidence in its ability to drive shoppers to its own channels, with its innovative in-store environments, market-leading online proposition, and host of apps to increase the number of touchpoints with its shoppers.”
Nike is ranked a Top250 retail brand in RXUK Top500 research.
