Nike’s digital playbook pays off, but China losses weaken growth
Double-digit digital growth for the Nike brand across North America, Asia-Pacific and Latin America, plus Europe, Middle East and Africa, was partially tempered by declines in Greater China during the third quarter of fiscal 2022, the Oregon-headquartered multinational announced recently.
Overall, the firm grew its revenues by 5% to around $10.9 billion year on year, it said. Revenues for the banner Nike brand reached $10.3 billion, representing an 8% rise over the previous year’s figures.
The brand was particularly strong in the digital segment (up 19%), registering a 33% boost for the channel in its home continent, which took the top spot. Meanwhile, direct sales achieved $4.6 billion, an increase of 15%.
Greater China revenues decreased by 8% in the third quarter, however, which the company told reporters was due to a strategic decision to prioritise North America over the Chinese market when faced with limited supplies caused, to a significant degree, by covid-related factory shutdowns in Vietnam in 2021. Global shipping delays, especially in North America, also played their part.
Roughly half of the company’s footwear is made in Vietnam, so a shortage of Nike, Jordan and Converse-branded sports shoes was experienced across a majority of consumer markets last year. Although its Vietnamese factories have now reopened, Nike’s executive vice president and chief financial officer, Matt Friend, stated that marketplace demand continued to “significantly exceed” available inventory supply.
Mr Friend further described a “healthy pull market” across the firm’s geographies. President and chief executive, John Donahoe, optimistically added that its third-quarter increases illustrated that the company possesses “the right playbook to navigate volatility”.
Image credit: Yuyang Liu.
