Increased marketing spend fails to help Nike reach quarterly profit targets

Charlie Spargo's picture
by Charlie Spargo

Shoe giants Nike's decision to double down on spending for marketing and new product launches doesn't seem to have paid off - as they report lower-than-expected earnings.

In the three months until May 31st, Nike's ‘selling and administrative expenses’ rose 9%, while marketing spend rose by 3% YoY to $1 billion. This was mainly down to large-scale activations and worldwide campaigns.

However, this caused net income to fall by about $150 million from $1.14 billion a year earlier. Revenue, in fact, rose by 4% to $10.2 billion.

Nike's analysts had expected earnings by this point to reach about 66 cents a share. With the above information taken into account, they only managed to achieve earnings of 62 cents a share.

In February, Nike released an advert it had created featuring the most successful tennis player currently playing, Serena Williams. Titled 'Dream Crazier', it aired during the Oscars ceremony and featured multiple other world-class female athletes including Simone Biles, Sue Bird, Chloe Kim, Ibtihaj Muhammad.

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