Economy1 hour ago (Dec 21, 2021 12:42PM ET)
© Reuters. FILE PHOTO: The Nike swoosh logo is seen outside the store on 5th Avenue in New York, New York, U.S., March 19, 2019. REUTERS/Carlo Allegri/File Photo
By Uday Sampath Kumar
(Reuters) -Nike Inc beat quarterly revenue and profit estimates on Monday, lifted by strong demand for its sports shoes and apparel in North America, and said it was more confident of easing supply chain issues in its next fiscal year.
The company’s shares rose 3.7% in extended trading.
Nike (NYSE:)’s second-quarter sales in North America, its largest market, jumped 12%, as a reopening U.S. economy and the roll out of vaccines gave people confidence to rush back to stores and splurge on sneakers for running and hiking.
“Nike is doing well to get in as much inventory as possible. Long term, I don’t see the momentum going away from the company because the products are so highly coveted by consumers,” said Jessica Ramirez, retail analyst at Jane Hali & Associates.
The sportswear maker said its direct-to-consumer business had record Black Friday sales in North America despite supply constraints heading into the holiday season due to months-long factory closures in Vietnam, where about half of all Nike footwear is manufactured.
However, those supply issues and fresh COVID-19 lockdowns led to a 20% fall in Nike’s revenue in Greater China in the second quarter.
Nike said weekly footwear and apparel production was at roughly 80% of pre-closure volumes at its now fully open factories in Vietnam.
The closures caused Nike to cancel production of roughly 130 million units, Chief Financial Officer Matt Friend said.
The company’s overall revenue rose 1% to $11.36 billion in the second quarter, beating estimates of $11.25 billion, according to IBES data from Refinitiv. The company expects a low single-digit rise in third-quarter revenue compared to estimates of a 2.5% increase.
Nike’s profit of 83 cents per share beat estimates of 63 cents.
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.