The business of the sporting goods group Nike is being slowed down by increased logistics costs and the strong dollar. At the same time, inventories are skyrocketing and are being reduced with the help of discounts, among other things.
This is reflected in the business figures. In the past quarter, profits fell year-on-year by 22 percent to around 1.47 billion US dollars (1.5 billion euros). Sales increased by four percent to just under 12.7 billion dollars in the first business quarter, which ended in August, as Nike announced on Thursday after the US stock market closed.
With stable exchange rates, there would have been a ten percent increase in sales, it said. The strong dollar makes foreign earnings appear lower on the balance sheet when translated into US currency.
The quarterly figures were above the expectations of the analysts - investors still let the share fall by more than nine percent in after-hours trading at times.
One trigger was the increase in inventories by 44 percent to $9.7 billion. Nike is "determined" to reduce the surplus, CFO Matthew Friend said in a conference call with analysts. As early as the summer, Nike resorted to discounts for this. Inventories rose particularly sharply in North America. On the contrary, in the midst of the corona pandemic, Nike had to struggle with delivery bottlenecks.
While sales in Nike's largest market, North America, rose 13 percent to $5.5 billion last quarter, they were almost flat in Europe, the Middle East and Africa at $3.33 billion. In China, the third most important region, they fell by 16 percent to a good 1.65 billion dollars.