Sports giant Nike reports increased revenues and somewhat lower results in the past quarter. At the same time, bottlenecks continue to delay deliveries.
Nike pulled in 10.9 billion dollars in the last quarter, thus increasing revenue by five percent compared to last year.
It is also above expectations of 10.6 billion dollars, according to a consensus estimate obtained by Bloomberg.
After tax, the result landed at 1.4 billion dollars, slightly down from last year’s 1.45 billion – but well above expectations of 1.17 billion.
This gives an adjusted earnings per share of 87 cents, slightly down from last year’s 90 cents – but above the consensus estimate of 72 cents.
The Nike share rises after the release of the numbers, and at the time of writing is up 5.85 percent in after-sales.
Production takes longer
So far this year, however, the Nike share is down around 22 percent. The stock is thus heading towards its worst start to the year since 2008, according to Bloomberg. At the same time, soaring inflation has affected the wallets of people around the world, while bottlenecks have created delays in the world’s value chains.
Nike rounds off the quarter with an inventory worth 7.7 billion dollars – up 15 percent from the previous year. The main reason is that there are more goods in transport, since the disruptions in the supply chain mean that production takes longer, according to the current report.
Sales growth in the US
But the delays in the value chain are partly offset by strong demand, the company emphasizes.
– Our results for the third quarter show Nike’s ability to navigate through volatility, says CFO Matt Friend in a statement.
– Demand in the market continues to significantly exceed the available inventory supply, he adds.
In Nike’s largest market – North America – sales revenues grew by nine percent in the past quarter. On the other hand, sales in China fell by five percent.
Shuts down in Russia
Nike has previously suspended operations in Russia in light of the invasion of Ukraine.
Earlier this month, the company stated that it has temporarily closed all its stores in the country. It is also not possible to shop at Nike’s online store in Russia.
“We are deeply concerned about the devastating crisis in Ukraine, and our thoughts go out to all those affected, including our employees, partners and their families in the area,” the company said in a statement at the time, according to Wall Street Journal.
Nike operates 116 stores in Russia, according to the newspaper.