Nike runs past manufacturing setbacks; sales jump
By Uday Sampath Kumar
(Reuters) -Nike Inc mentioned on Monday manufacturing points pinching gross sales over the previous six months have been now behind it, positioning the corporate to make the most of surging demand for sports activities sneakers and attire.
Shares of the world’s largest sportswear maker rose 5.9% to $137.90 in prolonged buying and selling, because it additionally beat third-quarter income and revenue estimates.
Pandemic-related manufacturing facility closures final yr in Vietnam, the place about half of Nike’s footwear is made, and the sluggish return to regular manufacturing within the nation led to a scarcity of Nike, Jordan and Converse sneakers throughout most markets.
All Nike factories in Vietnam at the moment are operational, with complete footwear and attire manufacturing in step with pre-closure volumes, the corporate’s Chief Monetary Officer Matthew Good friend mentioned.
Nonetheless, transport delays have been nonetheless a trigger for concern for Nike, particularly in North America the place transit occasions have worsened, Good friend added.
The corporate’s North America income rose 9% within the third quarter, helped by sustained pandemic demand for athletic put on, return of college sports activities and worth will increase.
“As folks returned to some kind of new regular, that also has concerned loads of out of doors actions like path working, golf and tennis,” mentioned Jessica Ramirez, retail analyst at Jane Hali & Associates.
Income in Larger China fell 8% within the third quarter, as Nike was compelled to prioritize sending its restricted provides to North America over the Chinese language market.
The corporate mentioned it was unclear what the influence of a recent surge in COVID-19 circumstances in China would have on its fourth-quarter outcomes.
Nike’s income rose 5% to $10.87 billion within the quarter ended Feb. 28, whereas analysts had anticipated $10.59 billion, in response to IBES information from Refinitiv.
On an adjusted foundation, the corporate earned 87 cents per share, beating estimates of 71 cents per share.
(Reporting by Uday Sampath in Bengaluru; Modifying by Shounak Dasgupta)
