Nike Tops $50 Billion for First Time as Jordan Sales Soar
Nike reported fourth quarter revenue of $12.8 billion on Thursday that topped expectations of $12.6 billion, although earnings of $0.66 fell a penny shy of estimates from S&P Global Market Intelligence.
It ends a streak of six straight quarters beating Wall Street revenue and EPS estimates.
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“FY23 was a milestone year for Nike as our unique advantages continue to drive competitive separation,” John Donahoe, Nike CEO, said in a statement with the earnings release. “Our investment in innovation and our digital leadership are fueling broad-based growth across our portfolio of brands, as we create value by serving the future of sport.”
Full-year revenue topped $50 billion for the first time for the sportswear giant, and at $51.2 billion is twice as much as longtime rival Adidas. Nike revenue was up 10% for the year, but net income dipped 16% to $5.1 billion as the company faced elevated inventory levels and a higher tax rate. Earnings per share was $3.23.
The fiscal year-end results are the one time a year the company provides financial results of its wholly owned Jordan brand, whose foundation was the signing of NBA icon Michael Jordan to an endorsement contract in 1984.
Jordan was the strongest performer of Nike’s divisions with a 29% sales gain to $6.6 billion, compared to Men’s (10%), Women’s (4%) and Nike Kids (3%).
Jordan brand revenue has more than doubled since 2019 as it expanded into more women’s gear, non-basketball items and international sales. The “performance” basketball shoe market is down over the past decade, but the “retro” or lifestyle business has more than made up for the declines.
Nike has signed a new crop of young NBA stars to promote the Jordan brand in Zion Williamson, Luka Doncic and Jayson Tatum. Last year’s No. 1 NBA Draft pick Paolo Banchero also signed with the brand.
Nike’s stock is down 3% year-to-date to a recent $113; it dipped again in after-hours trading following the earnings release. The S&P 500 is up 14%. Investors are concerned about weak demand in North America and Nike wholesale partner Foot Locker recently issued downbeat guidance.
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