Nike stock price falls as third-quarter sales of $10.36 billion beat expectations

0
  • Shares of Nike fell 5.4% on Friday after a mixed third-quarter earnings report.
  • Sales of $10.36 billion were below Wall Street’s target of $11.02 billion.
  • The company said congestion at U.S. ports was reducing sales, but growth in digital sales has softened the blow.

Nike stock fell on Friday after the sportswear maker’s third-quarter sales fell short of Wall Street expectations, with the company pointing to supply chain issues. The shares fell 5.4%.

The company said late Thursday that its quarterly revenue was $10.36 billion, which is below Refinitiv’s consensus estimate of $11.02 billion. A year ago, sales were $10.10 billion.

Supply chain “challenges” caused North American revenues to drop 10% to $3.56 billion. The company said it faced global container shortages and congestion at U.S. ports, which delayed inventory flow by more than three weeks in the quarter and hurt wholesale shipments. The sales, however, were partially offset by a 15% growth in its Nike Direct business.

Nike also said sales at physical stores in the Europe, Middle East and Africa regions fell as 45% of company-owned stores were closed in the last two months of the quarter due to restrictions related to COVID-19. But digital sales in those regions have increased by 60%.

“We continue to see the value of a more direct, digital-driven strategy fueling even greater potential for NIKE over the long term,” Nike chief financial officer Matt Friend said in the income statement.

At the same time, Greater China revenue grew 42% on a currency-neutral basis.

Earnings rose 70% to $0.90 per share from $0.53 per share and beat the consensus estimate of $0.76 per share.

Nike said it plans to resume share buybacks in the fourth quarter of 2021. The company temporarily suspended share buybacks during the fourth quarter of 2020 to maximize


liquidity

during the pandemic.

Share.

About Author

Comments are closed.