Earnings Results: Ways Nike expects the year to get better: Easing discounts, lower costs and doing more to attract runners and female customers

by | Sep 28, 2023 | Stock Market

After rival running-shoe makers put Nike Inc. on defense this year and overall demand remained subdued, executives for the athletic-gear giant on Thursday said shopper enthusiasm for sneaker-buying could be getting a bit better. That could mean more expensive shoes and clothes for customers, as sellers lay off price cuts intended to juice demand. But it will also mean better financial results for Nike
with executives saying that the rampant discounting over the past year could start to ease.

“We are cautiously planning for modest markdown improvements for the balance of the year, given the promotional environment,” Chief Financial Officer Matthew Friend said on Nike’s earnings call Thursday to discuss its first-quarter results, in which per-share profit topped expectations while sales fell just short. Management said it continues to expect full-year sales to rise by mid-single digits. And they said they saw product costs falling in the second half of the year and a slightly more forgiving foreign-exchange backdrop — all of which translate to improving margins. Shares jumped 7.9% after hours. Nike reported earnings after stiff competition — from the likes of Adidas
and running-shoe maker On Holding
— and weaker demand for sneakers and clothing kept prices lower, after last year’s surge in inflation forced customers to cut back on spending as they covered more basic needs. While analysts say Nike stands to benefit from an enduring shift toward more casual gear, recent outlooks from sporting-goods chains like Foot Locker Inc.
and Dick’s Sporting Goods Inc.
which sell a lot of Nike gear, have been more downbeat. Friend said Nike is planning for “near-term sales declines” at Foot Locker, as both the sneaker maker and the retai …

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