Nike Inc. reported Sept. 29 $12.69 billion in revenue for its fiscal year 2023 first quarter ended Aug. 31, 2022. That’s up 4% from $12.25 billion in the previous fiscal year’s first quarter.
Revenue from Nike’s online sales — which includes those made on Nike.com, the Nike app, the Nike SNKRS app and others — grew 23% compared with the previous fiscal year’s first quarter. Nike online sales reached the highest net revenue for a quarter to date, CEO John Donahoe said in a call with analysts. Nike did not share exact figures.
Similarly, Nike’s commerce app had its highest single-quarter traffic during the first fiscal quarter of 2023, Donahoe said, according to a transcript from Seeking Alpha. Donahoe attributed Nike ecommerce growth to “societal movement toward comfort and health and wellness” as well as “the fundamental shift in consumer behavior toward digital.”
Key growth components
Chief financial officer Matt Friend added that Nike’s ecommerce growth included increased traffic, higher conversion and growth in average order value. He did not specify how much the traffic increased, but a Similarweb analysis shows that the number of consumers who reached the sign-out page on Nike’s ecommerce website and received a “thank you” confirmation grew 8.5% year over year for the fiscal first quarter. It also grew 20% from the company’s fourth quarter, which ended May 31, 2022. Similarly, a look at traffic to Nike’s main landing page, Nike.com, increased 5.1% year over year for the first quarter ended August 2022.
Nike also attributes the increase to a personalization tool that went live this quarter.
“New membership tools we put in place last year in fiscal ’22 that went live in Q1 create one-to-one connections at scale by delivering personalized consumer journeys and experiences, which in turn drive first purchases and increased loyalty,” Donahoe said.
For example, the SNKRS app had 3.8 million member entries for the Travis Scott AJ1 shoes that were released in July. That’s the most entries the app has ever had for a single shoe.
Of Nike’s $12.69 billion in Q1 revenue, the retailer reported $5.1 billion came from direct-to-consumer sales, which is sales from its own stores and online sites. That’s a 14% year-over year increase in DTC sales.
Without the merchant’s Jordan and Converse brands, Nike reported $12.05 billion in revenue for its first fiscal quarter. That’s a 4% increase from $11.64 billion in the previous fiscal year’s first quarter.
The retailer’s ecommerce sales represented 24% of brand revenue in fiscal year 2022 excluding that from Jordan and Converse brands. Friend said Nike’s digital revenue has tripled since fiscal year 2019 to exceed $10 billion in fiscal year 2022. Nike Inc. ranks No. 10 in the Top 1000, Digital Commerce 360’s database of the largest North American e-retailers by web sales.
Nike isn’t immune to retail’s inventory surplus
Like other retailers, Nike is dealing with an inventory surplus. The retailer’s inventory in North America grew 65% year over year, Friend said. Globally, the inventory amounted to $9.66 billion in value, which is up 44% compared with the year-ago period.
“Over the past three years, we have leveraged our operational playbook to manage through supply chain disruption and COVID-related store closures. … This quarter, it became clear to us that conditions in North America are shifting once again,” Friend said.
He said retailers ordering earlier, combined with strong consumer demand and less-predictable delivery times, led to elevated inventory levels. Looking forward, Friend said the retailer expects it has already hit its North American inventory peak in Q1 FY23.
“We anticipate seeing sequential improvement over the year as we rebalance supply and continue serving strong consumer demand,” Friend said.
For the fiscal first quarter ended Aug. 31, 2022, Nike reported:
- $12.69 billion in revenue. That’s up 4% from $12.25 billion in the previous fiscal year’s first quarter.
- Nike Digital, the brands ecommerce sites and apps, grew 23%. Nike did not report an exact figure.
- $5.1 billion in direct-to-consumer sales, which is a 14% increase from the previous year’s first quarter.
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