"Our strong start to FY23 highlights the depth and breadth of Nike's global portfolio, as we continue to manage through volatility. Our competitive advantages, including the strength of our brand, deep consumer connections and pipeline of innovative product, continue to prove that our strategy is working. We expect our unrelenting focus on better serving the consumer to continue to fuel growth and create value like only Nike can", commented John Donahoe, President and CEO of Nike.

First Quarter Results

In the first quarter of fiscal 2023, which ended on the 31^st of August, the company reported a revenue increase of 4%, or 10% on a currency-neutral basis, reaching 12.7 billion US dollars, as compared to the same period of last fiscal year, led by Nike's Direct growth of 14%. Wholesale revenue rose by 1% on a reported basis and by 8% on a currency-neutral basis, due to improved levels of available supply of inventory for partners.

Nike's brand revenue totalled 12.0 billion US dollars in this period, up by a 4% growth on a reported basis and by 10% on a currency-neutral basis, driven by double-digit currency-neutral growth in North America, EMEA* and APLA**, partially offset by declines in Greater China. The sportswear giant highlighted that the Nike brand's digital business increased by 23%. Converse's revenue amounted to 643 million US dollars, growing by 2% on a reported basis and by 8% on a currency-neutral basis, year-over-year, also driven by double-digit growth in the North America and Europe regions, partially offset by declines in Asia.

Nike's gross margin declined by 220 basis points to 44.3% in the first quarter of the current fiscal year, on a comparable basis to the first quarter of fiscal 2022, mainly "driven by elevated freight and logistics costs", as well as lower margins in  Nike's Direct business. The company noted that "the overall decrease in margins was primarily driven by North America, which took measures to liquidate excess inventory through NIKE Direct markdowns and wholesale marketplace actions". 

In the first quarter of financial 2023, the company's net income totalled 1.5 billion US dollars, reflecting a decrease of 22%, as compared to the same period of the prior fiscal year, and diluted earnings per share declined by 20% to 0.93 US dollars.