Nike feels the pressure of the high currency and sales

• Nike has issued a warning that the strong currency and reductions intended to reduce its inventory will continue to pressure its profitability.
• In the meantime, the company’s stockpiles increased by more than 40% from a year before.
• Nike shares plummeted more than 9% in extended trade following the announcement.

Nike has issued a warning that the strong currency and reductions intended to reduce its inventory will continue to pressure its profitability.

The sportswear juggernaut, which generates more than half of its income outside of North America, increased its estimate of the impact of the rising dollar on its annual revenue to $4 billion (£3.6 billion).

In the meantime, the company’s stockpiles increased by more than 40% from a year before. Nike shares plummeted more than 9% in extended trade following the announcement.

According to Matthew Friend, Nike’s chief financial officer, “headwinds from foreign exchange altered considerably in the previous 90 days as the trend of US dollar strengthening has intensified.”

Nike is the newest company to completely depart Russia. Numerous Nike shoes were taken in a major trainer robbery.

The corporation reported a 22% decrease in net income to $1.5 billion for the three months ending in August in its quarterly update to investors.

The company claimed that increasing transportation costs and heavier markdowns had hurt profit margins.

Additionally, as a result of supply chain concerns, the total amount of stocks grew by 44% to $9.7 billion.

However, the business revealed that its revenue for the same time increased to $12.7 billion, exceeding Wall Street expectations.

Analysts claimed that as consumers cut back on their spending as a result of the cost-of-living issue, demand for Nike’s brands, notably Jordan and Converse, had dropped.

Hanyang Chan from the consultancy Euromonitor International told the BBC that “higher inflation is obviously driving up expenses, diminishing margins, and discouraging customers, especially currently on splurging out on highly discretionary things.”

As their stockpiles grew in recent months, prominent US retailers including Target and rival sportswear producer Under Armour also provided significant reductions.

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