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Source:NESPIX ,Shutterstock
Summary
- Container shortage and port congestion hampered sales in North America.
- Nike’s third-quarter net income totaled US$1.45 billion.
- The sportswear giant’s stocks jump over 120 percent in 2020.
Nike Inc. (NYSE:NKE) posted revenue growth of 3 percent to US$10.4 billion in the third quarter ended February 28, 2021, driven by robust sales in mainland China. Its revenues were US$10.10 billion in the corresponding period of 2020.
Nike’s sales in China soared 51 percent to US$2.28 billion year-over-year, while sales in North America came in at US$3.56 billion, against US$3.98 in Q3 of 2020. In Europe, Middle East & Africa (EMEA), revenues dropped 9 percent year-over-year to US$2.61 billion.
The company reported a 71 percent earnings growth in Q3 and a marginal rise in sales year-over-year. Its net income reached U$1.45 billion, up from US$ 847 million, in the year-ago period.
Nike forecasts its revenue to grow in “low-to-mid teens” during the financial year 2021 while revenue in the fiscal fourth quarter is projected to jump 75 percent year-over-year, CFO Matt Friend said in the company’s third-quarter earnings call.
Previously, the Oregon-based athletic footwear and apparel brand expected the revenue to increase in high single-digits to low double-digits during the fiscal year.
Port Congestion, Store Closures Hit Supplies
Nike said container shortages and port congestion on West Coast delayed the inventory supply in North America by more than three weeks. In the EMEA region, 45 percent of Nike-owned stores were closed in the last two months of the quarter amid the pandemic.
However, Nike’s direct sales grew 20 percent on a reported basis and 16 percent on a currency-neutral basis to US$4 billion. Nike’s digital sales increased 54 percent on a currency-neutral basis. In the third quarter, the company paid US$434 million in dividends to shareholders, up 14 percent from the previous year.
Pic Credit: Pixabay.
Nike Stocks Soared 121% Last Year
Nike shares staged a stellar performance in 2020, but the stock seems to have lost its momentum this year. The sportswear giant’s shares had jumped over 121.8 percent in 2020.
The COVID-19 outbreak took a toll on the company’s earnings in the 2020 fiscal. Nike’s overall net income declined 36 percent year-over-year to US$2.54 billion, while revenue fell 4 percent to US$37.40 billion, down 2 percent on a currency-neutral basis.
