Washington DC [US], July 2: Nike on Tuesday warned of continued weakness in the global sportswear market despite a sales boost from the World Cup, as rival Adidas reported quarterly results that largely topped Wall Street expectations.
"Our consumer is under pressure around the world," chief financial officer Matthew Friend told analysts, adding that Nike was feeling the impact in the sportswear business.
The company said it did not expect consumer sentiment to improve over the next six months. Three months ago, Nike had warned that the Iran war could create unexpected volatility in consumer spending, including through higher oil prices.
Nike's results for the past quarter largely beat analysts' average expectations, although sales again declined in the important Chinese market. The company's shares were down around 3% in after-hours trading.
Chief executive Elliott Hill pointed to a positive effect from the World Cup, which is being co-hosted by the United States, Nike's home market.
He said Nike had sold two and a half times more national team products at the start of the tournament than at the same point during the previous World Cup in 2022.
Nike reported revenue of $10.97 billion for the quarter, down 1% from a year earlier but ahead of analysts' average estimate of $10.86 billion. Net income rose to $1.07 billion from $211 million a year earlier, primarily driven by a $986 million tariff-related refund.
Nike generated $4.83 billion in revenue in North America, slightly below analysts' expectations, while sales in China totalled about $1.3 billion, exceeding market forecasts despite another year-on-year decline in the key market.
The company has been trying to recover from a downturn partly caused by its own strategy of prioritizing direct-to-consumer sales at the expense of wholesale partners. That approach allowed competing brands to gain shelf space at retailers, particularly in the United States, weighing on Nike's sales.
Under chief executive Hill, Nike has sought to rebuild relationships with retail partners while shifting its product strategy back towards performance sports after lifestyle products had taken a larger share of its portfolio in recent years.
Source: Qatar Tribune
