China Net Finance, October 2nd - Today, Nike Group announced its first quarter performance for the fiscal year 2025 (ending on August 31, 2024). During the reporting period, Nike Group achieved a revenue of $11.6 billion, a year-on-year decrease of 10%; Net income was $1.1 billion, a year-on-year decrease of 28%.
Despite the less than optimistic performance, Matthew Friend, Executive Vice President and Chief Financial Officer of Nike Group, remains confident that the first quarter results are largely in line with expectations. The resurgence of this scale takes time, but we have seen early victories - from the momentum of key movements to accelerating our innovation and pace of innovation
Due to the dual challenges of sluggish consumer market and competition from emerging brands, both brands under Nike Group experienced a year-on-year decline in revenue during the reporting period. Among them, Nike's brand revenue was $11.1 billion, and Converse's revenue was $500 million. Looking at the channels, direct to consumer revenue decreased by 13% to $4.7 billion, while wholesale sales decreased by 8% to $6.4 billion.
Looking at different regions, Nike's brand revenue has experienced a particularly severe decline in Europe, the Middle East, and Africa, with a 13% decrease from $3.6 billion in the same period last year to $3.1 billion; The revenue in the North American market decreased by 11% from $5.4 billion in the same period last year to $4.8 billion. In contrast, the Greater China region had the smallest impact on revenue, recording nearly $1.7 billion in the first quarter, a decrease of only 4%.
At the same time, the group has taken a series of measures to reduce costs and increase efficiency. According to the financial report, the group's gross profit margin increased by 120 basis points to 45.4% and inventory decreased by 5% compared to the previous year to $8.3 billion, due to the reduction of Nike brand product costs, warehousing and logistics costs, and the benefit of last year's strategic pricing actions. In addition, due to the reduction in salary related expenses, the group's operating and management expenses decreased by 7% to 2.8 billion US dollars.
During the Paris Olympics, Nike also attempted to boost global sales by expanding brand marketing. According to the financial report, the "demand creation expenses" increased by 15% to $1.2 billion this quarter, reflecting the group's investment in key sports events. Nike stated that starting from this summer's global sports event, Nike has further demonstrated its firm determination to return to sports, with athletes at its core, to connect more closely with consumers around the world, and to accelerate the enhancement of brand influence.
It is worth mentioning that this summer, Nike signed tennis player Zheng Qinwen to win her first Olympic gold medal in women's singles tennis, driving the domestic tennis craze, and the brand's tennis products have also received good market feedback. Among them, Nike's declaration that the only Paris souvenir they want to take away is the gold medal quickly sold out once the same T-shirt was launched. According to Nike, the Nike Air Zoom Vapor X HC Zheng Qinwen winning edition shoe will also be sold in limited time.
Speaking of the performance in the Chinese market, Flender expressed confidence in Nike's long-term development in Greater China and the broad prospects of the Chinese sports industry. This quarter, our story in innovation and athletic performance received positive feedback from the market. We will continue to focus on athletic performance products and innovation. The demand for innovation in the Chinese market is significantly higher than in other markets. Nike will continue to leverage its innovation advantages to provide more support to the Chinese market, especially in the areas of products, digital platforms, and supply chains, to continue meeting the needs of local consumers