Nike, Inc.unveiled its fiscal 2024 third-quarter financial results today, showcasing a nuanced picture of the sportswear giant's performance. Despite slight revenue growth, the company grappled with restructuring charges, impacting its bottom line.
In the third quarter, Nike's revenues edged up to $12.4 billion on both reported and currency-neutral bases. Notably, Nike Direct revenues saw a modest increase to $5.4 billion, while wholesale revenues climbed to $6.6 billion, reflecting a three percent uptick. However, the digital sales for the Nike brand experienced a downturn of three percent on a reported basis and four percent on a currency-neutral basis.
The company reported a gross margin increase of 150 basis points to 44.8 percent. However, restructuring charges dampened the overall performance, with selling and administrative expenses rising by seven percent to $4.2 billion, inclusive of $340 million attributed to restructuring.
John Donahoe, President & CEO of Nike, Inc., acknowledged the necessity of adjustments to propel the company's growth trajectory forward. He expressed optimism about the ongoing innovation cycle and collaborative efforts with wholesale partners to enhance the marketplace.
Matthew Friend, Executive Vice President & CFO, echoed similar sentiments, emphasizing the company's focus on efficiency and maximizing the impact of new innovations.
Despite the challenges, Nike's balance sheet showed resilience, with inventories declining by 13 percent to $7.7 billion and shareholder returns remaining robust. The company continued its trend of increasing dividend payouts, marking 22 consecutive years of such growth. In the third quarter alone, Nike returned approximately $1.4 billion to shareholders through dividends and share repurchases.
As Nike navigates through its restructuring phase, the spotlight remains on its ability to sustain growth momentum amidst evolving market dynamics and operational adjustments.
