NIKE, INC. reports fiscal 2022 first quarter results

Key Points :

First quarter reported revenues were $12.2 billion, up 16 percent compared to prior year and up 12 percent on a currency-neutral basis.

NIKE Direct sales were $4.7 billion, up 28 percent on a reported basis and up 25 percent on a currency-neutral basis.

NIKE Brand Digital sales increased 29 percent, or 25 percent on a currency-neutral basis.

Gross margin increased 170 basis points to 46.5 percent.

Diluted earnings per share for the quarter was $1.16, up 22 percent.

NIKE, Inc. [NKE] today reported fiscal 2022 financial results for its first quarter ended August 31, 2021.

“NIKE’s strong results this quarter are continued proof of our deep consumer connections, unrelenting innovation pipeline and a digital advantage that fuels our brand momentum,” said John Donahoe, President and CEO, NIKE, Inc. “We have the right playbook to navigate macroeconomic dynamics, as we create value through our relentless drive to fuel the future of sport.”**

First Quarter revenues increased 12 percent, on a currency-neutral basis, with growth across all channels, led by NIKE Direct growth of 25 percent. Contributing to NIKE Direct growth was the steady normalization of owned physical retail, which grew 24 percent, exceeding pre-pandemic levels from the first quarter of fiscal 2020. NIKE Brand Digital business continued strong growth, increasing by 25 percent, led by North America growth of 43 percent.

“NIKE is a growth company with a market opportunity as large as it's ever been,” said Matt Friend, Executive Vice President and Chief Financial Officer, NIKE, Inc. “Our Q1 results illustrate how NIKE’s Consumer Direct Acceleration strategy continues to fuel growth and transform our long-term financial model.”

First Quarter Income Statement Review

Revenues for NIKE, Inc. increased 16 percent to $12.2 billion compared to the prior year, up 12 percent on a currency-neutral basis.

Revenues for the NIKE Brand were $11.6 billion, an increase of 12 percent to prior year on a currency-neutral basis, led by NIKE Direct double-digit growth in North America, APLA and EMEA.

Revenues for Converse were $629 million, up 7 percent on a currency-neutral basis, led by performance in Direct to consumer in both North America and Europe.

Gross margin increased 170 basis points to 46.5 percent, led by margin expansion in our NIKE Direct business, a higher mix of full-price sales and favorable changes in foreign currency exchange rates, partially offset by higher product costs primarily due to increased freight costs.

Selling and administrative expense increased 20 percent to $3.6 billion.

Demand creation expense was $918 million, up 36 percent, primarily due to normalization of spend against brand campaigns as we annualize marketplace closures in the prior year, as well as continued investments in digital marketing to support heightened digital demand.

Operating overhead expense increased 15 percent to $2.7 billion, primarily due to an increase in wage-related expenses, higher strategic technology investments and NIKE Direct variable costs.

The effective tax rate for the quarter was 11.0 percent compared to 11.5 percent for the same period last year, due to increased benefits from stock-based compensation and discrete items, offset by a shift in our earnings mix.

Net income was $1.9 billion, up 23 percent, and Diluted earnings per share was $1.16, increasing 22 percent.