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Nike (NKE) +6% on Q4 beats, improving supply chain
Nike (NKE) shares climbed 6% on Tuesday after the footwear manufacturer posted top and bottom-line Q3 beats and said that its supply chain issues had improved.
Nike (NKE) shares surged 6% higher on Tuesday after the sports clothing and footwear company’s earnings and revenue sprinted past Wall Street expectations in fiscal Q3.
During the three months to 28th February, Nike’s earnings fell 3.3% from a year ago to $0.87 per share, but that was still 16 cents ahead of the $0.71 forecasts.
While Nike’s sales took a hit in China due to the recent spread of COVID-19, strong demand in the US helped its group revenues to rise 5% year-over-year to $10.87bn versus the $10.59bn consensus.
Even more encouraging for investors is the fact that Nike’s supply chain issues are no longer as severe as they once were.
The Oregon-based multinational is expecting to see an “improved flow of supply” in North America during the current quarter despite other niggling domestic transport problems.
Nike is already seeing strong demand across its inventory, with equipment sales soaring 36% in fiscal Q3, and apparel and brand footwear growing 12% and 5%, respectively.
This helped sales in North America to climb 9% to $3.88bn, which offset the 8% dip in China where a still healthy $2.16bn was generated.
Reacting to the report, Credit Suisse analyst Michael Binetti said that it was a “positive” showing from Nike as “strong sequential acceleration” was evident across the business.
Nike opted against providing guidance for fiscal 2023 just yet and revealed that it would do so in its Q4 update.
Binetti said that this and the “very wide” Q4 earnings forecast may be frustrating, but believes that Nike’s impressive recent performance is encouraging given many of the headwinds it had to face.
Nike shares were up on Tuesday, rising 6.4% to $138.35.
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