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Nike (NKE) Q1 2022 earnings

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Pedestrians walk past the American multinational sport clothing brand, Nike store and its logo seen in Hong Kong.

LightRocket | LightRocket | Getty Images

Nike shares dropped in extended trading Thursday after the sneaker giant reported quarterly revenue that missed analysts’ expectations, due to softening demand in North America.

Recent trading was more than 2 percent lower for the stock.

Here’s how Nike did during its fiscal first quarter compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

  • Earnings per share: $1.16 vs. $1.11 expected
  • Revenue: $12.25 billion vs. $12.46 billion expected

Net income for the three-month period ended Aug. 31 grew to $1.87 billion, or $1.16 per share, compared with $1.52 billion, or 95 cents per share, a year earlier. Analysts expected $1.11 per share. This was higher than what actually happened.

The sales increased to $12.25 Billion from $10.59 Billion a year prior. This was below the $12.46 billion expected.

Greater China sales grew 11%. This is the lowest growth among its geographical regions. In quarters gone by, this region was a major revenue driver for Nike.

North America’s revenue increased 15% to $4.88 Billion. However, this was far below the 5.05 billion analysts from FactSet expected.

The Nike brand’s digital sales grew 29% over the past year. It has made investments in its website, as well as several mobile apps. This was especially important during the current health crisis when more people prefer to shop online.

Nike is currently coping with the closure of factories in Vietnam that produce approximately 50% of its shoes and 30% its apparel since mid-July.

After reporting a blowout fiscal fourth quarter in June, Nike had said it was expecting annual revenue to grow at a low double-digit pace, surpassing $50 billion. According to Refinitiv, analysts have recently reduced their forecasts to $49.81billion. Nike did not provide an update forecast in the press release.

Nike shares were up 13% in the year-to-date as of Thursday’s close but are still down about 9 percent from their peak reached in early august. It has a market capitalization of $25.2 billion.

The story of this company is still in development. Stay tuned for new updates.

Find the full press release from Nike here.

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