Nike sales outpace estimates as it trims inventory level
BNN Bloomberg
Nike Inc. reported robust quarterly sales that beat Wall Street’s expectations as the sportswear brand worked down its excess inventory, but profitability missed estimates.
Global revenue rose 14 per cent to US$12.4 billion in the quarter ended Feb. 28. That was above analysts’ average estimate of US$11.5 billion. Gross margin was 43.3 per cent, below the 43.7 per cent estimate.
Chief Executive Officer John Donahoe and his team have made progress in dealing with the merchandise glut that has forced the company to discount merchandise, hurting profit margins. Inventories were up 16 per cent from the year prior after the company reported a 43 per cent jump the previous quarter.
Even so, the company cited “higher markdowns to liquidate inventory” as hurting gross margin, as well as higher costs for its materials and freight.
