If there is a consumer slowdown looming towards the end of 2023, the world’s largest sports equipment retailer sees no signs of it.
” We continue to see that consumer demand for our brands and products is very, very strong, ” Nike (Nike) CFO Matthew friend said on the company’s earnings call. “The consumer proves his flexibility “”
Nike’s sales fell by almost 2% in the United States, and its total sales exceeded Wall Street estimates for the first time in almost two years. But after the announcement of the financial first-quarter earnings, Nike executives said little about any concerns about demand, and said that they expect sales growth during the crucial holiday season.
Adrian Yeh, senior consumer analyst at Barclays Bank, called the report a “relief” because it challenged a growing narrative that Nike could be hit by escalating macro headwinds that many believe will slow consumer spending in the fourth quarter of 2023. Shares of the shoe giant reversed some of their losses in 2023 due to the news, rising by more than 6% on Friday. Nike’s stock has fallen by almost 20% for the year.
“When we see a decline of consumers, we often see a crisis in the dollar, and so people start to get rid of their second, third or maybe fourth favorite brand,”Yeh said. “But their favorite brand they continue to spend on. I think that’s what you see with the strength of Nike being the number one brand locally and globally.”
Student loan payments are scheduled to resume in October, and some large retailers selling multiple brands have noted that this is likely to hurt sales in their business.
“There are some headwinds coming, especially with [student loans], that the loan forgiveness period expires,” Macy’s (M) CEO Jeff Gennett said on August 22, sending the stock tumbling on concerns about consumer health through the rest of the year.
The company Nike, which privately sells a fairly large selection of sportswear, did not mention student loans once. In China, where economic growth has been slower than many expected including Nike, CEO John Donahoe indicated that the retailer feels able to withstand fears of falling demand and new competition.
