Nike beat sales expectation for the fourth quarter and fiscal year 2023.
The athletic giant reported Q4 revenues were $12.8 billion, up 5 percent compared to 2022. This beat Nike’s previously issued guidance of for Q4, which had revenues growing in the flat to low single-digits. It also came in ahead of analysts’ expectations of $12.59 billion in sales. Net income was down 28 percent to $1 billion, with diluted earnings per share of $0.66, which was down 27 percent year-over-year. Analysts surveyed by Yahoo were looking for EPS of 0.67 for Q4.
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For the full year, revenues were $51.2 billion, up 10 percent over the prior year. Nike had been aiming for full-year revenue to grow in the high single-digits, up from its prior guidance in the mid-single-digits. Net income for the year was $5.1 billion, down 16 percent, with diluted earnings per share of $3.23, which was down 14 percent.
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Inventories, a key concern for analysts, were flat year-over-year for the period ending in May. The news comes as retailers such as Macy’s and DSW announce renewed wholesale partnerships with Nike as the brand looks to right size inventory.
Nike’s gross margin took a hit in Q4 due to higher freight and logistics costs, more markdowns and foreign currency exchange headwinds.
Nike CEO and president John Donahoe said in a statement that the company’s results were a testament to the Swoosh’s long-term strategy.
“Our investment in innovation and our digital leadership are fueling broad-based growth across our portfolio of brands, as we create value by serving the future of sport,” Donahoe said.
In Q4, Nike brand revenue grew 5 percent to $12.2 billion and Nike Direct revenues were up 15 percent to $5.5 billion. Q4 Wholesale revenues were $6.7 billion, down 2 percent.
“We finished the year with mid-teens currency-neutral revenue growth and a healthy marketplace — setting the foundation for sustainable, profitable growth in FY24 and beyond,” said Nike EVP and CFO Matthew Friend in a statement.