News: Nike sales crimped by pandemic, shipping issues; forecast disappoints.
(Reuters) – Nike Inc’s quarterly sales missed estimates due to shipping issues and a pandemic-induced slump in brick and mortar stores. Investors were disappointed with the world’s largest sports shoe manufacturer’s sales forecast for the full year.
According to Refinitiv’s IBES data, Nike forecast full-year sales growth of “low to mid-range teenagers” just below the 15.9% sales increase forecast by analysts.
Nike shares lost around 3% in post-market trading.
“I think expectations of Nike were very high as many analysts raised revenue and earnings expectations for the quarter,” said Ivan Feinseth, investment director at Nike shareholder Tigress Financial Partners.
Revenue rose from $ 10.1 billion to $ 10.36 billion, while analysts expected an average of $ 11.02 billion. The company announced that North American revenue declined 11% on a currency-neutral basis as container shortages and congestion in US ports held inventory for more than three weeks.
“We expect to see these late sales in the fourth quarter,” said Matthew Friend, Nike chief financial officer.
Container freight traffic in the US has slowed significantly in recent months due to COVID-19 outbreaks among dock workers and security restrictions aimed at containing the spread of the virus. At the same time, the ports are struggling with a surge in cargo due to the demand for bulk cargo triggered by pandemics.
Nike’s net income rose for the third quarter ended February 28 from $ 847 million, or 53 cents per share last year, to $ 1.45 billion, or 90 cents per share. Analysts were expecting earnings per share of 76 cents.
In Europe, the Middle East and the Africa region, 45% of stores operated by Nike were closed in the last two months of the quarter. Currently, 65 percent of stores in EMEA are open or open at reduced hours, Nike said.
Rival Adidas ADSGn.DE announced last week that it had reopened 95% of its stores after the coronavirus lockdown.
Reporting by Praveen Paramasivam in Bengaluru and Richa Naidu in Chicago; Editing by Dan Grebler and Peter Cooney
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