Nike posts mixed results as sales fall short of estimates, hurt by U.S. port congestion
- Congested ports in the United States and ongoing store closures in Europe weighed on Nike's sales during its fiscal third quarter.
- In North America, revenue dropped 10% year over year, as Nike said shipments have been delayed by more than three weeks.
- But Nike continued to see momentum online. Its e-commerce sales surged 59% during the period.
Nike reported Thursday quarterly sales that missed the mark, as widespread port congestion in the United States and ongoing store closures in Europe tied to the pandemic weighed on results.
The retailer hasn't yet offered an outlook for the full year.
Its shares were down more than 2% in after-hours trading.
Here's how Nike did during the quarter ended Feb. 28, compared with what analysts were expecting, based on a survey by Refinitiv:
- Earnings per share: 90 cents vs. 76 cents expected
- Revenue: $10.36 billion vs. $11.02 billion expected
Nike reported net income of $1.45 billion, or 90 cents per share, compared with $847 million, or 53 cents per share, a year earlier. That was better than the 76 cents per share that analysts were expecting, based on Refinitiv data.
Total sales rose to $10.36 billion from $10.1 billion a year earlier. That was lower than the $11.02 billion forecast by analysts.
In North America, revenue dropped 10% year over year, hurt by shipment delays that Nike said have been dragging on for more than three weeks. That also meant sales at its wholesale partners were impacted, as businesses such as department stores and sporting goods outlets didn't receive goods on time. They'll likely now need to discount some of that merchandise to make space on the shelf for more in-season styles.
Backlogged West Coast ports, a global container shortage, and a truck driver shortage in the U.S. continue to be headaches for businesses from Nordstrom to Urban Outfitters to Peloton. Many have said they expect these issues to drag on until the second half of the year.
In its Europe, Middle East and Africa region, Nike said sales at its brick-and-mortar retail stores dropped due to pandemic-related closures and restrictions, while digital sales in those markets grew 60% in the latest period. It said about 60% of its stores in the region are open today, with some operating on reduced hours.
In Greater China, a region that is further along in recovering from the pandemic, sales climbed 51%.
Nike's direct-to-consumer business grew 20% year over year, to $4 billion. And online sales for the Nike brand surged 59%, as consumers looked to add new sneakers and athletic gear to their wardrobes, even if they were stuck at home.
"We continue to see the value of a more direct, digitally-enabled strategy, fueling even greater potential for Nike over the long term," Chief Financial Officer Matt Friend said.
Nike shares are up more than 110% over the past 12 months, as of Thursday's market close. It has a market cap of more than $225 billion.
Find the full press release from Nike here.
This story is developing. Please check back for updates.
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