Nike reduces quarterly profit by 24%

Performance versus style. Those are the two forces that move the business of sportswear. Nike, the most powerful brand, saw a 24 percent drop in profit to $ 950 million. Global sales were around 9,070 million, a volume of revenue very similar to the one reported a year ago. The United States is its vulnerable point, with a 3% drop in turnover.


The figures are for the first quarter of the Nike fiscal year and have for the first time the new distribution of the business structure. Analysts' expectations were very low in view of how sales in the trade sector had progressed over the summer. It was, therefore, easy to beat the projections on both the profit and the revenue side.

Of the total sales, 480 million correspond to the Converse brand, which fell 16% mainly by the North American market. In the specific case of Nike, its strong point is in China, where sales grew 12%. They were also the best in Europe and Africa, with a 5% increase in revenues over the same period a year ago.

The first reaction to the publication of the results was an increase of more than 3%, which moderated until completely lost because the accounts again show the vulnerability that Nike has in its own market against Adidas and Under Armor, where it is not capable of reversing the fall in sales. Also before the competition of rival marks of informal clothing like Lululemon Athletica.

Nike already had to agree to open its own sales channel in Amazon e-commerce portal, while investing in the development of a new system of direct sales to the customer. The company reports in parallel that it acquired 15.3 million securities during the first quarter, amounting to 849 million euros, as part of the share repurchase program that it approved two years ago.

The Beaverton Sports Firm is being forced to make substantial rebates to sustain sales. The Food Locker, Dick's Sporting and Finish Line chains have long warned that the price side pressure is too big and that reduces margins. Nor is it a secret that the strength of Adidas in its own market is making nervous Nike managers.