Nike revenues up 2% in Q1 as higher prices offset waning demand
According to CFO Matthew Friend, the group will be leaning on Air Max 1, Infinity and V2K to profit off the growing demand for running shoes moving forward
Nike revenues increased 2% to $12.9bn (£10.5bn) in the first quarter ended 31 August due to a 2% increase in digital sales, as higher prices for sneakers and clothing helped offset a hit from waning demand and president cost pressures.
As a result, the group expects a 1% increase in Q2 gross margins after six consecutive quarters of declines, on the back of fewer planned markdowns.
Due to the increase in digital sales, the retailer’s inventories fell 10% in the period, as the company focused on reducing excess stock ahead of the holiday season to avoid having to offer “steep” discounts.
According to CFO Matthew Friend, the group will be leaning on Air Max 1, Infinity and V2K to profit off the growing demand for running shoes moving forward.
In addition, Nike has maintained its annual forecasts and expects Q2 revenues to be up slightly.
John Donahoe, president and CEO of Nike, said: “Q1 offered proof of what Nike can deliver when we connect great innovation, great storytelling and great marketplace experiences to consumers.
“Moving forward, we are laser-focused on scaling these successes with greater consistency and speed as we continue to integrate and streamline our business. This is how we’ll extend our leadership position and drive growth over the long-term.”
Matthew Friend, executive vice president and CFO of Nike, added: “Our first- quarter results demonstrated the impact of staying on the offence over the past fiscal year. With a healthy marketplace and another quarter of brand and business momentum, we are strengthening our foundation for sustainable, profitable, long-term growth.”
