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"Nike is a brand that'belongs' to China and serves China."

According to the British Financial Times (Financial Times), on June 24, local time, Nike CEO John Donahoe (John Donahoe) was talking on the phone with Wall Street analysts on Nike’s latest earnings report. This sentence responds to questions about Chinese brand competition.

Screenshot of "Financial Times" report

Nike revenue exceeds $50 billion

Best result in 50 years

Sports goods manufacturer Nike (NKE-US) turned losses into profits in the fourth quarter of fiscal year 2021, and wrote its best results in 50 years in revenue. It also stated that it benefited from the economic restart and the rebound in North American performance. Hope to break through 50 billion U.S. dollars for the first time, the stock price rose 13% after the market on Thursday (24th).

The Chief Financial Officer of Nike said at the French conference that this year (until May of next year) revenue will have a low double-digit growth, and the amount will exceed $50 billion for the first time in the company's history, which is higher than the Refinitiv analyst estimate. Of 48.46 billion U.S. dollars. Among them, the growth in the first half of the year will be slightly higher than that in the second half.

Nike supply chain factory orders are sufficient

Nike turned losses into profits, and the supply chain Ruhong (1476-TW), Far East New (1402-TW), and Winterthur (9910-TW) in the supply chain benefited simultaneously.

Ruhong bluntly said that from the order point of view, Nike’s operations will grow by double digits this year, and it will grow all the way to at least 2025. On the other hand, Ruhong’s market share will continue to be driven by brand customers in the direction of supply chain consolidation. The rise will drive the operation upward.

Under the strong demand for customer orders, Ruhong's operations this year will rise quarter by quarter to the fourth quarter, and the annual profit estimate will start from 2 equity. The company disclosed that it has been in touch with orders for the first quarter of next year and arrange production capacity.

Far East New believes that the overall textile business in the third quarter is going up steadily. In addition to strong sales, Nike also actively promotes the concept of environmental protection and performance. Far East has caught up with the trend. At present, the proportion of environmentally friendly yarns in chemical fiber products has reached 7-8. to make.

With the large-scale vaccination in Europe and the United States, outdoor activities have accelerated and restarted, which also stimulated Nike footwear sales. Related supply chains such as Winterthur and Baihe (9938-TW) are also favored by the market and will benefit simultaneously.

Affected by Xinjiang Cotton

Greater China is not as expected

However, the performance of the Greater China market was weaker than expected. The local revenue in the fourth quarter increased by 17% to 1.93 billion US dollars, which was lower than the market estimate of 2.22 billion US dollars.

Nike, like Adidas, H&M and other retailers, was affected by the Xinjiang cotton boycott in this season. In this regard, Nike executives said that China's performance is improving month by month.

In the fourth quarter, digital revenue surged 41% over the same period last year, and 147% surge compared to the year before, highlighting Nike's achievements in the field of e-commerce.

Even with the addition of negative news, the “Financial Times” pointed out that Donahoe still believes that China will continue to be Nike’s fastest-growing market.

He also attributed part of Nike's success in China to its decades of investment, and said, "We have been operating in China for more than 40 years, and now we are China's largest sports brand, and we have always looked to the future."

Nike surged 13% after the market. The stock has fallen 5.6% as of Thursday’s close this year, making it one of the Dow Jones Industrial Index’s underperforming stocks.