Nike Holiday Sales Exceed Projections, Driven by Growth in North America

On Thursday, Nike announced strong holiday sales that surpassed estimates, aided by stronger growth in North America than expected.

According to Wall Street’s earnings projections, as highlighted by a survey of analysts conducted by LSEG (formerly known as Refinitiv), expectations for the American athletic footwear and apparel company were at 74 cents per share. However, the company outperformed with earnings per share reaching 77 cents. Revenue projections were anticipated to reach $12.28 billion, but actual results came in slightly higher at $12.43 billion.

During the three months ending on Feb. 29, the company disclosed a net income of $1.17 billion, which is 77 cents per share. This differs from the previous year’s figures of $1.24 billion, which was 79 cents per share, for the same period. Excluding restructuring charges, which amounts to 21 cents per share, earnings per share would have been 98 cents.

Sales spiked to $12.43 billion, which was up slightly from $12.39 billion the previous year.

Demand in North America has been unpredictable, with sales increasing by about 3% to $5.07 billion in comparison to the anticipated $4.75 billion, according to StreetAccount.

In the meantime, sales across the remaining Nike regions came in under estimates. Revenue for Europe, the Middle East, and Africa fell 3% to $3.14 billion, which is worse than the $3.17 billion expectation by analysts. In China, sales rose 5% to $2.08 billion, just under the $2.09 billion analysts had predicted. Sales in Asia Pacific and Latin America rose 3% to $1.65 billion, slightly below the $1.69 billion analysts originally expected, per StreetAccount.

With consumers scaling back on spending on nonessential items such as apparel and footwear, Nike has rechanneled its efforts over the past few months toward areas within its control. This strategy involves cost-reduction plans and driving efficiency aimed at strengthening profits and protecting margins.

In December, the company revealed a major restructuring plan looking to reduce costs by around $2 billion over the next three years. It also revised its sales guidance downward, attributing the adjustment to anticipated subdued demand in the upcoming quarters.