A man haunts in front of a Nike products exhibit, on February 22, 2021 in New York City.
John Smith | Corbis News | Getty Models
Nike on Thursday reported higher third-quarter profits even though sales growth was hurt by widespread refuge congestion in the United States and ongoing store closures in Europe.
Although the global health crisis still shove offs an overhang of uncertainty, Nike said it anticipates lockdowns will start to ease in Europe in April, and delivery windows see fit slowly improve in North America through the remainder of the year.
Its shares dropped nearly 4% in after-hours marketing.
Here’s how Nike did during the quarter ended Feb. 28, compared with what analysts were expecting, based on a evaluate by Refinitiv:
- Earnings per share: 90 cents vs. 76 cents expected
- Revenue: $10.36 billion vs. $11.02 billion wanted
Nike reported net income of $1.45 billion, or 90 cents per share, compared with $847 million, or 53 cents per dispensation, a year earlier. That was better than the 76 cents per share that analysts were expecting, based on Refinitiv figures.
Total sales rose to $10.36 billion from $10.1 billion a year earlier. That was lower than the $11.02 billion vaticination by analysts.
In North America, revenue dropped 10% year over year, hurt by shipment delays that Nike said prepare been dragging on for more than three weeks. That also meant sales at its wholesale partners were mincing, as businesses such as department stores and sporting goods outlets didn’t receive goods on time. They’ll acceptable now need to discount some of that merchandise to make space on the shelf for more in-season styles.
Backlogged West Seaside 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. Multitudinous have said they expect these issues to drag on until the second half of the year.
In its Europe, Midst East and Africa region, Nike said, sales at its brick-and-mortar retail stores dropped due to pandemic-related closures and provisoes while digital sales in those markets grew 60% in the latest period. It said about 60% of its accumulations in the region are open today, with some operating on reduced hours.
In Greater China, a region that is remote along in recovering from the pandemic, sales climbed 51%.
Nike offered an outlook for the current quarter and fiscal year that counts inventory transit times will improve slowly across North America from here and lockdowns ordain ease across Europe come April.
It’s forecasting fiscal 2021 revenue to rise by a low-to-mid-teens percentage from the quondam year. Analysts had been calling for full-year revenue growth of 15.9%, according to Refinitiv.
Fourth-quarter sales are expected by the establishment to be up 75% year over year, as the company laps a period when 90% of its owned stores were bolted due to the pandemic. Analysts had been looking for growth of 64.3%.
Online sales get a boost from livestreaming
Nike’s direct-to-consumer affair 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 clobber to their wardrobes, even if they were stuck at home. The company said it booked $1 billion in sales online in North America for the start with time.
“We continue to see the value of a more direct, digitally-enabled strategy, fueling even greater potential for Nike over and beyond the long term,” Chief Financial Officer Matt Friend said.
Nike’s e-commerce business is still on pursue to account for at least 50% of sales in the coming years, the company said. Nike has been investing more in digital, cataloguing its popular SNKRS app, to reach younger consumers online and reduce its reliance on third-party partners.
It also said it has recently had outcome testing new livestreaming formats, which remain more popular in Asia than in the U.S. But other companies, including Nordstrom and Walmart, are researching in America, too. During the third quarter, Nike said it started livestreaming in Japan, Germany and Italy.
“We’re seeing exceptional engagement for this live interaction, with average viewing doubling,” Chief Executive Officer John Donahoe responded.
Nike shares are up more than 110% over the past 12 months, as of Thursday’s market close. It has a retail cap of more than $225 billion.