EconomyFinancialNike reports lower profits on rising costs and a...

Nike reports lower profits on rising costs and a strong dollar

Nike reported lower quarterly profit on Thursday, hurt by rising costs and a stronger dollar.

High transportation costs due to the global supply chain crisis are affecting the company's results, although it expects the problems to subside in the coming months.

Nike said costs rose 10% to $3.9 billion in the first quarter.

As delivery times and consumer demand increased this year, retailers responded by ordering inventory earlier than usual. When the transit shipping time began to improve rapidly, this led to an increase in inventories.

Nike noted that this, combined with consumers facing increased economic uncertainty, has seen promotional activity accelerate across the market, especially for apparel brands.

a strong dollar

Major US multinationals such as Microsoft and Coca-Cola have warned that the strength of the US currency is hurting them.

Nike had said it expected foreign exchange difficulties to weigh on its full-year revenue outlook.

The company's net income fell to $1.47 billion, or 93 cents a share, in the quarter ended Aug. 31, from $1.87 billion, or 1.16 a share, a year earlier.

Shares of the company, one of the Dow's worst-performing components so far this year, fell 2.3% in after-hours trading.

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