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The athletic apparel leader continues to make progress with a winning strategy
Thursday 24 Mar 2022 Author: James Crux

Third quarter results published on 21 March from Nike beat analysts’ expectations and sent shares in the world’s largest sportswear company higher in US after-hours trading.

Despite ongoing supply chain disruption, Oregon-based Nike managed to boost margins as it accelerates its shift to direct to consumer sales, which form a key plank of its growth strategy.

NIKE Direct sales were up 17% to $4.6 billion in the quarter amid further digital market share gains and a boost from ‘the steady normalisation of traffic’ in Nike-owned brick and mortar stores.

With customer demand for the Nike brand outpacing supply, the sneakers-to-soccer balls seller benefited from robust demand in its biggest market, North America, where it delivered 33% digital sales growth.

However, Nike also flagged short-term volatility driven by consumer inflation, stock shortages, the war in Ukraine and China lockdowns.

Sales in North America grew by 9% year-on-year in the third quarter, though Nike expects to see a decline in fourth quarter sales in the region as it faces a tough comparison with the same period 12 months ago.

Revenue was down 5% year-on-year in Greater China, where Nike is rebuilding its business after a boycott of western brands by Chinese consumers hit sales early last year.

Any worsening in relations between China and the West over the former’s support for Russia could be damaging for Nike given the importance of the Chinese market.

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