(AOF) – Nike, whose share fell by nearly 3% on the forecourt, reported, for the fourth quarter of its fiscal year 2022-2023, sales up 5%, amounting to $12.83 billion and has surpassed estimates of $12.59 billion. Earnings per share of 66 cents were 2 cents below forecast. Profit was $1 billion, down 28% from a year earlier.
In Europe, the Middle East and Africa, sales increased by 3%.
“Next year is going to continue to be a promotion-heavy environment, which puts management pressure on wholesalers,” CEO John Donahoe said on the earnings conference call.
At the end of May, inventories, worth $8.5 billion, were stable year on year, but more than 20% above their 2021 levels.
Nike’s gross margin fell 140 basis points to 43.6% in the past quarter, weighed down by numerous promotions and discounts aimed at eliminating excess inventory.
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Series of laundry innovations
These innovations are surfing on the development of consumers’ ecological concerns. Thus the flagship brand of Procter & Gamble, Ariel, has launched a range comprising 40% more plant ingredients than conventional products. The brand, leader in the sector in France with around 24% market share, also relies on cardboard containers for its capsules. The latter often concentrate innovations because they constitute a very dynamic segment, with increases in value more than twice as high as the increase in the market as a whole.
Skip, a brand of the Unilever group, has also chosen the French market to launch a preview of new capsules and all-cardboard packaging. The Henkel group with its Le Chat brand has launched a detergent in the form of bars that reduce the use of plastic.
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Concerns remain
According to the Federation of Specialized Trade, Procos, in October 2022, activity fell by 1.5% over one year. Nevertheless, the beauty and health (+ 5.2%) and specialized food (+ 3.5%) activity is dynamic compared to October 2021. The frequentation of the points of sale was very impacted by the problems of fuel and bad weather. Compared to October 2019, the pre-covid year, the drop in attendance is very sharp (-20.9% in October). Shopping centers and the outskirts are more impacted than city centers with a difference of four to five points.
Several reasons for concern exist for the future. The players are experiencing a very significant scissor effect given the increase in their operating costs while the evolution of demand is very uncertain. Very few brands can pass on the increase in their costs to their selling prices. The federation therefore asks, among other things, to limit the indexation of the Commercial Rent Index to + 3.5% for the rents of all companies in 2023. It also invokes an absolute urgency: to cap the price of energy for 2023 and retroact on the contracts already signed to prevent the rate of failures from accelerating.