Nike Rises on Stronger-Than-Expected Q1 Apparel Sales
Nike shares rose 5% following stronger-than-expected Q1 apparel sales, with total revenue at $11.7 billion, a 1% increase year-over-year. Apparel revenue surged 9% to $3.3 billion, while footwear sales fell 1% to $7.4 billion. Gross margin narrowed to 42.2%, exceeding estimates, but net income dropped 31% to $0.7 billion. Inventory decreased 2% to $8.1 billion, and cash reserves fell to $8.6 billion from $10.3 billion a year earlier.
Oct 1 - Nike shares climbed about 5% on Wednesday after the sportswear company reported fiscal first-quarter results that showed apparel strength offsetting softer footwear sales.
Quarterly revenue came in at $11.7 billion, up 1% from a year earlier. On a currency-neutral basis, sales slipped 1%. Footwear revenue fell 1% to $7.4 billion, slightly below expectations, while apparel revenue rose 9% to $3.3 billion, topping forecasts.
Revenue for the Nike brand advanced 2% to $11.4 billion, with growth in North America offset by a weaker performance in Greater China. Nike Direct revenue declined 4% to $4.5 billion as digital sales dropped 12% and company-owned retail slipped 1%. Wholesale revenue increased 7% during the period.
Gross margin narrowed by 320 basis points to 42.2%, pressured by lower average selling prices, deeper discounts, and higher tariffs in North America. The figure still came in above consensus estimates of 41.7%.
Net income fell 31% to $0.7 billion. Nike ended the quarter with inventory down 2% year-over-year at $8.1 billion, and cash of $8.6 billion compared with $10.3 billion a year earlier.
