NIKE(US:NKE) Southwest Securities·2024-04-10 16:00Investment Rating - The report maintains a "Buy" rating for Nike, indicating an expected relative price increase of over 20% in the next six months [27]. Core Views - Nike's Q3 2024 revenue was $12.43 billion, flat year-over-year, with a slight decline in EPS to $0.77, aligning with market expectations. The company aims for a 1% revenue growth for the full fiscal year [2][8]. - The company is focusing on product innovation and has significantly improved inventory levels, with inventory down 13% year-over-year to $7.73 billion, the lowest since the pandemic [3][22]. - Gross margin improved to 44.8%, up 1.5 percentage points year-over-year, driven by strategic pricing and lower shipping costs [17][20]. Summary by Sections Financial Performance - Q3 2024 revenue was $12.43 billion, with Nike brand revenue at $11.95 billion (+2%) and Converse brand revenue at $0.5 billion (-19%). Net profit was $1.17 billion, down 5% [2][8]. - For the first three quarters of FY2024, total revenue reached $38.76 billion, a 1% increase year-over-year [2]. Channel Performance - Direct sales showed slight growth, with offline sales up 6% and online sales down 4%. Wholesale revenue increased by 3% [10]. - North America saw a 3% revenue increase, while EMEA experienced a 4% decline. Greater China grew by 6%, and APLA increased by 4% [14][15]. Product Performance - Footwear remains the primary revenue driver, with Q3 footwear revenue at $8.16 billion (+3%). Sports equipment saw a significant increase of 20% [12]. - The company plans to focus on the Air series, especially with new launches coinciding with the upcoming Olympics [3][12]. Margin and Cost Management - The gross margin for Q3 was 44.8%, reflecting improvements in supply chain efficiency and pricing strategies [17]. - Total expense ratio increased to 34%, with creative expenses rising by 1.4 percentage points [20]. Inventory Management - Inventory levels improved significantly, with a 13% decrease year-over-year, and inventory turnover days reduced to 101.6 days [22].