Nike Inc. surpassed Monday’s quarterly earnings and profit estimates due to strong holiday demand for sports shoes and apparel in North America, despite supply problems pushing down sales in China.
Sports and casual apparel have been an essential part of everyday fashion since the beginning of the pandemic. People are throwing away sweatpants and jogger office clothing and increasing sales of rivals such as Nike, Under Armor and Adidas.
Nike’s sales in North America, its largest market, surged 9% in the company’s third quarter. This was also boosted by the resurgence of school sports and rising prices.
However, Greater China’s revenues fell in the quarter as the closure of last year’s factory in Vietnam, where about half of all Nike shoes are manufactured, forced the company to prioritize supply to North America over the Chinese market. It decreased by 8%.
Sales could be further squeezed by the surge in COVID-19 infections over the past few weeks and new blockades in major cities in China, analysts said.
According to Refinitiv’s IBES data, Nike’s revenue for the quarter ending February 28 was $ 10.87 billion, up 5%, while analysts expected it to be $ 10.59 billion.
On an adjusted basis, the company earned 87 cents per share, above the estimate of 71 cents per share.
By Uday Sampath