Weak China sales, low consumer demand to blame for Nike’s profit fall
By Joseph Ekeng
United States sportswear giant, Nike, has declared a fall in its third-quarter profit though it beat street estimates. The company attributed the decline to weak China demand and unfavourable consumer behaviour.
According to the company, earnings came in at $1.24 billion, or $0.79 per share.
This compares with $1.40 billion, or $0.87 per share in the same period in 2022.
Analysts on average had expected the company to earn $0.55 per share, according to figures compiled by Thomson Reuters. Analysts’ estimates typically exclude special items.
According to a report on CNBC, the company’s profit has been impacted by bloated inventory, which continued to weigh on its margins and sales in China fell short of expectations.
More so, Nike, like other brands in the retail category, has struggled to offload a glut of inventory brought on by the supply chain crisis and shifting consumer demands.
During an earnings call with investors recently, Nike executives said they’re “increasingly confident” Nike will exit the fiscal year with healthy inventory levels.”
They also expect to see “even leaner inventory” than they’d anticipated given sales momentum, the executives added.
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