Shares of Nike Inc. ticked higher on Monday’s extended trading after reporting upbeat third-quarter sales due to the robust demand in North America.
The American footwear manufacturing company rose 5.31% or 6.91 points to $137.10 per share.
It completely reversed a drop of 0.83% or 1.09 points to $130.19 per share in the regular hours market. The upward movement also added $10.93 million to its capitalization.
Accordingly, its sales in North America, the firm’s most significant segment, rose 9.00% in the third quarter.
Meanwhile, Nike noted that sales in Greater China, its third-leading market, skidded 5.00% from the prior year.
Subsequently, a boycott among Chinese consumers toward Western brands caused the firm’s sales to take a hit early last year.
Nevertheless, its Q3 revenue increased 5.00% year-over-year to $10.87 billion. The figure outpaced the average market expectation of $10.59 billion.
Then, the shoe retailer’s net income for the three months was $1.40 billion, or $0.87 per share.
This record topped profit estimates for $0.71 EPS. It also edged up from the previous result of $1.45 billion, or $0.90 per share a year earlier.
Remarkably, the better-than-expected figures proved the ability of the firm to operate in a volatile environment.
Given its global reach, Nike is now the frontrunner in how other retailers manage the persisting economic challenges.
At present, companies are grappled with surging oil prices, inflation, and disrupted supply chains driven by Russia’s invasion of Ukraine.
Nike CEO John Donahoe also noted that the marketplace demand significantly exceeds the available inventory supply.
He further mentioned in the earnings call that revenue growth could have been even more robust over the holiday period.
However, there is not enough merchandise on hand to meet shopper demand.
Nike succeeds in manufacturing setbacks
Regardless, all of the business’ factories in Vietnam are now operational following pandemic-driven shutdowns that halted manufacturing.
Nike CFO Matthew Friend further stated that the total footwear and apparel production are now in line with pre-closure volumes.
However, he mentioned that shipping delays were still a cause for concern, specifically in North America.
Correspondingly, the company has moved up its buying timelines to secure enough products on shelves this fall.
As of February 28, Nike reported that inventories on its balance sheet totaled $7.70 billion. The figure climbed 15.00% from the prior-year period.
The firm explained that the robust customer demand partially offset the significant inventory levels.
Regardless, Nike holds off giving its financial guidance for the coming year due to the uncertainties in the global economy.