By
Bloomberg
Published
Mar 22, 2024
Nike Inc. reported sales that were stronger than anticipated as the company ramps up a multiyear cost-cutting plan in the face of weaker demand for its sneakers and apparel.
The world’s largest sportswear retailer reported revenue of $12.4 billion for the quarter ended Feb. 29, higher than analysts’ expected, bolstered by better-than-expected sales in North America and Greater China.
Nike’s sales in the crucial China growth market rose 4.5% in the quarter. In North America, sales of $5.07 billion were up 3.2%.
Chief Executive Officer John Donahoe outlined a restructuring plan in December to cut $2 billion in costs over the next three years in response to weaker sales. Nike said in February that it would slash 2% of its global workforce as part of the plan, with layoffs to take place over two phases.
“We are making the necessary adjustments to drive Nike’s next chapter of growth,” Donahoe said in a statement.
Management has also been working to get rid of older merchandise to make room for fresh items after an inventory glut plagued the business last year. Inventories fell 13% for $7.7 billion for the quarter, a bigger decline than Wall Street predicted.
Nike has pumped money into advertising to spur demand, spending $1 billion on marketing in the quarter, up 10% from the prior period.
Shares rose 1.1% at 4:30 p.m. in after-market trading in New York on Thursday. The stock had been down 7.1% this year through the day’s close.