NIKE (NYSE:NKE) announced third-quarter earnings that surpassed expectations. Enhanced margins and robust performance in its North American business contributed to its success.
In the quarter ending February 29, Nike achieved adjusted earnings of $0.98 per share and generated $12.43 billion in revenue, exceeding the expectations of analysts who had predicted earnings of $0.76 per share and $12.27 billion in revenue.
Sales in North America increased by 18% compared to the same quarter last year, while sales in China, a crucial market for Nike, rose by 3%. This growth helped balance a 6% sales decrease in Europe, the Middle East, and Africa.
The company’s gross margin improved 150 basis points to 44.8%, attributed to increased prices and reduced costs for ocean freight and logistics.
Despite the positive results, shares dropped nearly 7% on Friday as the company warned of a revenue decline in the first half of 2025.
The sportswear giant is reducing its franchise operations as a cost-saving measure. The company also recognized that its direct-to-consumer approach has not been as effective in driving growth as anticipated, and it is facing challenges in the running category, with emerging brands capturing a larger market share.
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