- For Nike's North American Region (U.S. and Canada) during its fiscal Q3 2023 (the quarter ended February 2023), footwear sales were up $813m from 2019 and apparel sales were up $246M. However, footwear was down -15% quarter-over-quarter compared to the normal seasonality of +5%, which reflects the glut of excess athletic footwear in the market. Nike participates less in off-price liquidation, which is where a lot of the retail shopping was done during Holiday 2022. Nike CEO John Donahoe stated, “We're on track to hit our fiscal 2023 priorities of getting inventory in a healthy position and delivering revenue consistent with the financial goals we set earlier in the year.”
- On that the priority of getting inventory down, CFO Matt Friend said, “With strong traffic and retail sales growth and reduced inventory buys for the spring and summer seasons, we are increasingly confident that we will exit the year with healthy inventories across the marketplace. In fact, given our brand momentum, we now intend to move through even more units by year-end than we had previously considered. Both transit and buying time lines continue to tighten towards pre-pandemic levels... Along with an improving flow of seasonal supply, our decisive actions will enable Nike to compete at its best, driving consumer energy through new product, seasonally relevant assortments and fresh storytelling and premium retail experiences.”
- On its strategy in Running, Donahoe shared, “Today, we leverage our direct relationships with runners worldwide, fueled by insight from our Nike Run Club app, along with consumer feedback across brand and marketplace touch points to know how our consumers are using our product and what pain points we can solve to keep them moving. For example, we saw our Invincible consumers pushing more distance on their runs, which requires better support and protection. So this quarter, we introduced the Invincible 3, which is designed to provide maximum cushioning and comfort. It also offers a wider fit than some of our past running footwear and uses the most ZoomX foam of any of our road running shoes. It's a shoe that demonstrates how Nike isn't just innovating for performance but also designing to drive the lifestyle of running. Consumer response to the Invincible 3 was strong across our geographies and throughout NIKE Direct, strategic wholesale partners and running specialty doors. And what really sets Invincible 3 apart is how we executed across the marketplace, driving consistent storytelling across channels, working closely with our partners to elevate our own retail presentation and theirs, all with a sharp focus on helping consumers find the right shoe for them. This approach will be accelerating as we focus on positioning ourselves for share gains in this important category.”
- Management didn’t speak specifically about how the different channels were performing in the U.S. (footwear revenue in North America grew +31% YoY). Placer.ai shows good growth at its factory stores, outperforming that retail category.
- For Nike’s May-end quarter, revenue growth is expected to flatten as they reduced inventory commitments for the spring and summer to ensure that Nike and its partners could work through the excess inventory; wholesale revenue is expected to be down.
