On June 27, Nike, the U.S. sportswear giant, released key financial data for its fiscal 2022 fourth quarter and full year ended May 31, 2022. Its share price fell nearly 7% the next day and its market value dropped by $12 billion.
The financial report shows that Nike garnered a revenue of $12.2 billion in the fourth quarter, down 1% year-on-year, while its net profit was $1.4 billion, down 3% from the previous year. In fiscal year 2022, Nike’s annual revenue reached $46.7 billion, up 5% year-on-year, and its net profit was $6 billion, up 5% year-on-year.
Nike’s revenue in North America in the fourth quarter was $5.115 billion, down 5% year-on-year. Revenue in Europe, the Middle East and Africa was $3.251 billion, a year-on-year increase of 9%. Revenue in Asia Pacific and Latin America was $1.682 billion, up 15% year-on-year.
However, in the fourth quarter, Nike achieved a revenue of $1.561 billion in Greater China, down 19% year-on-year. Further, the company earned an annual revenue of $7.547 billion in fiscal 2022 in the region, down 9% year-on-year. Greater China has also become the only region where Nike’s revenue declined in fiscal 2022.
According to company’s own analysis, the decline in performance in Greater China was mostly due to the increase in costs for inventory, logistics and transportation which were caused by a large-scale epidemic. Analysts have mixed reviews of Nike’s prospects in the Chinese market this year, with spending cuts and a preference for local brands such as Li-Ning and Anta, even though several major Chinese cities have lifted their strict lockdowns against COVID-19 pandemic.
In addition, according to Chinese enterprise search app, NIKE Sports (China) Co., Ltd. and NIKE Commercial (China) Co., Ltd., which are wholly-owned by NIKE China Holding HK Limited, have registered 328 branches in Chinese mainland, but 107 of them have since been canceled.