Nike's latest earnings blew past Wall Street expectations, despite excess inventory taking a bite out of profits and disappointing sales in China.
The sneaker giant's inventories were up 16 percent compared to a year ago. The glut required the company to heavily mark down its products and lose out on profits.
On the positive side, Nike touted the success of its direct-to-consumer strategy.
“NIKE’s strong results in the third quarter offer continued proof of the success of our Consumer Direct Acceleration strategy,” said CEO John Donahoe in a press release.
The strategy launched in 2020 involves investing more in e-commerce technology and creating more opportunities for direct-to-consumer sales rather than through retailers.
“Fueled by compelling product innovation, deep relationships with consumers and a digital advantage that fuels brand momentum, our proven playbook allows us to navigate volatility as we create value and drive long-term growth," Donahoe said.
Gross margins were nonetheless down 43.3 percent for the quarter, even as the company exceeded expectations on earnings per share and revenue. Revenues were up 14 percent in the quarter.
“NIKE’s brand distinction and strong execution continue to create separation in the marketplace," said Chief Financial Officer Matthew Friend. "We have made tremendous progress on inventory as we position NIKE for sustainable and more profitable growth."
Voice AI is moving into cars, restaurants and customer service. SoundHound CEO Keyvan Mohajer explains the company’s growth and the future of voice-powered AI.
Americans are still spending, but rising anxiety over jobs, AI, housing and tariffs tells a different story. Kearney Consumer Institute’s Katie Thomas explains.
Disney is back in focus after Q3 earnings. Investors are watching streaming profits, theme parks and ESPN as the entertainment giant looks for its next catalyst
Healthcare policy is shifting fast, raising questions about drug prices, Medicare and access. Leap Health CEO Hani Elias explains what patients need to know.
The U.S. job market is cooling as hiring slows and employers turn cautious. LinkedIn’s Kory Kantenga breaks down jobs, wages, spending and AI’s impact.
AI is entering a new phase as enterprises move beyond experimentation and demand measurable returns. Appian CEO Matt Calkins discusses what comes next.
Commercial Metals CEO Peter Matt reveals how a $2.5B acquisition spree is transforming the 111-year-old steelmaker into a construction solutions powerhouse.
