By Uday Sampath Kumar
(Reuters) -Nike Inc said on Monday manufacturing issues pinching sales over the past six months were now behind it, positioning the company to take advantage of surging demand for sports shoes and apparel.
Shares of the world’s biggest sportswear maker rose 5.9% to $137.90 in extended trading, as it also beat third-quarter revenue and profit estimates.
Pandemic-related factory closures last year in Vietnam, where about half of Nike’s footwear is made, and the slow return to normal production in the country led to a shortage of Nike, Jordan and Converse sneakers across most markets.
All Nike factories in Vietnam are now operational, with total footwear and apparel production in line with pre-closure volumes, the company’s Chief Financial Officer Matthew Friend said.
However, shipping delays were still a cause for concern for Nike, especially in North America where transit times have worsened, Friend added.
The company’s North America revenue rose 9% in the third quarter, helped by sustained pandemic demand for athletic wear, return of school sports and price increases.
“As people returned to some sort of new normal, that still has involved a lot of outdoor activities like trail running, golf and tennis,” said Jessica Ramirez, retail analyst at Jane Hali & Associates.
Revenue in Greater China fell 8% in the third quarter, as Nike was forced to prioritize sending its limited supplies to North America over the Chinese market.
The company said it was unclear what the impact of a fresh surge in COVID-19 cases in China would have on its fourth-quarter results.
Nike’s revenue rose 5% to $10.87 billion in the quarter ended Feb. 28, while analysts had expected $10.59 billion, according to IBES data from Refinitiv.
On an adjusted basis, the company earned 87 cents per share, beating estimates of 71 cents per share.
(Reporting by Uday Sampath in Bengaluru; Editing by Shounak Dasgupta)
