Nike is in the midst of a broad restructuring to cut costs by about $2 billion over the next three years as consumer demand remains uncertain.
The company is in the midst of a broad restructuring to cut costs by about $2 billion over the next three years.Follow your favorite stocksThe Nike logo is displayed at a Nike Well Collective store on February 16, 2024 in Glendale, California.on Thursday reported holiday sales that beat estimates, helped by better than expected growth in North America.
Meanwhile, sales in the rest of Nike's regions came in below estimates. In Europe, the Middle East and Africa, revenue fell 3% to $3.14 billion, worse than the $3.17 billion that analysts had expected, according to StreetAccount. In China, sales grew 5% to $2.08 billion, just below the $2.09 billion analysts had expected. Sales in Asia Pacific and Latin America rose 3% to $1.65 billion, below the $1.69 billion analysts had expected, according to StreetAccount.
The cuts, along with "strategic pricing actions and lower ocean freight rates," also contributed to a 1.7 percentage point gain in gross margin – the first time the company saw its gross margin increase compared to the prior year in at least six quarters. Last month, Nike launched the Book 1, its latest basketball shoes with NBA star Devin Booker. But the release wasn't well received because it "looked more like a casual sneaker instead of basketball shoe," according to a research note from Jane Hali & Associates.
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