Record-breaking results at Nike sticks the boot into rival Adidas

Nike turned in better-than-expected revenues of £10.1bn last night as it looked to beat rival Adidas after the German company’s damaging split with rapper Kanye West.

Shares surged in after-hours trading after the US sportswear giant reported third-quarter financials that also showed pressure on profit margins.

Analysts were looking for signs that Nike could take market share from Adidas, which cut ties with West in October after he made anti-Semitic remarks.

The split left a £530 million gap in sales as Adidas stopped selling West’s Yeezy brand – sending its annual profit down 66 per cent and warning of another hit this year.

Nike – whose many celebrities include British tennis player Emma Raducanu and former US basketball player Michael Jordan, while being the official kit supplier to France’s Toulouse rugby team – will capitalize on its European rival’s troubles.

Sales for the three months to the end of February were 14 per cent higher than the same period last year, well above forecasts of £9.4 billion.

The results showed that Nike has benefited from purchases from higher-income consumers, shrugging off the impact of stubbornly high inflation and extending the pandemic-induced boom in so-called athleisure apparel.

The company reported a 27 percent increase in sales in its largest market, North America, while also seeing a 17 percent increase in Europe, the Middle East and Africa.

Net profit for the period was down 11 per cent to £1 billion, but that was better than the £690 million analysts had predicted on average.

Profit margins were squeezed as the company slashed prices to move inventory, while it was also hit by currency fluctuations and higher production, shipping and logistics costs.

Shares initially rose 5 percent in after-hours trading before falling 1 percent lower.

Chief executive John Donahoe said the “strong” results were further evidence of the success of his strategy.