Nike has outlined plans to make $2bn (£1.6bn) in cost savings over the next three years as demand slows and it looks ahead to a “softer” second-half sales outlook.
The sportswear giant posted revenue of $13.4bn (£10.6bn) for the second quarter to November 30, 2023, up 1% on a reported basis and down 1% on a currency-neutral basis year on year.
Nike’s direct sales were up 6% to reach $5.7bn (£4.5bn), while brand digital sales increased by 4% for the quarter.
Wholesale revenues during the quarter were down 2% on a reported basis to reach $7.1bn (£5.6bn).
Nike highlighted areas of “potential savings” including simplifying its product assortment, increasing automation and the use of technology, streamlining the organisation and leveraging its scale to boost efficiency.
The savings come as part of its bid to drive “greater long-term profitability” and “accelerate innovation at speed and scale”.
As part of the streamlining, Nike said it expects between $400m (£315m) and $450m (£354m) in pre-tax restructuring charges, which will be “recognised” in the third quarter trading update.
Nike president and chief executive John Donahoe said: “Our Q2 results demonstrated how we are getting back on our front foot in our key areas of innovation and growth.
“This quarter showed strong execution by our team as we focus on our winning formula of innovative product, distinctive storytelling and differentiated marketplace experiences.”
Chief financial officer Matthew Friend added: “Nike’s second-quarter financial performance was a turning point in driving more profitable growth.
“As we look ahead to a softer second-half revenue outlook, we remain focused on strong gross margin execution and disciplined cost management.”
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