Nike sales rise, but supply chain issues and inventories weigh on earnings

A woman shops for shoes in the Nike Factory Store at the Outlet Shoppes at El Paso, in El Paso, Texas on November 26, 2021.

Despite supply chain issues and declining sales in Greater China, Nike had a strong first fiscal quarter.

A rise in shipping costs and shipping times has been a problem for Nike. During the quarter, the company's inventory levels increased compared to a year ago.

The company's shares fell after hours.

The results of a survey of analysts by Refinitiv show how Nike did in its first fiscal quarter.

• Earnings per share: 93 cents vs. 92 cents expected
• Revenue: $12.69 billion vs. $12.27 billion expected

Net income for the three-month period ended August 31 fell 22% to $1.5 billion, or 93 cents per share, from $1.87 billion, or $1.18 per share, a year ago.

The revenue was up 4% to $12.7 billion, compared with $12.2 billion a year ago.

Nike is looking to sell its sneakers and other merchandise directly to customers and scale back on what it sells through wholesale partners. The company's direct sales grew by 8% to $5.1 billion. Sales for Nike's wholesale business increased by 1%.

In the first quarter of its fiscal year, Nike said it had an inventory increase of 4% to $9.7 billion, which it attributed to supply chain issues and partly to strong consumer demand.

Greater China's total sales were down 16% from a year ago. The company's business has been disrupted in the region due to Covids. In the previous quarter, Nike said it expected issues in Greater China to have a negative effect on its business.

In the first quarter of the fiscal year, Nike's total sales in North America increased by 15% to $5.5 billion. Despite inflation, consumer demand hasn't waned according to the sneaker giant.

You can read the earnings release here.

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