Nike (NKE) – Get the Class B report from NIKE, Inc. Shares jumped in premarket trading after the sportswear giant posted stronger-than-expected third-quarter profits and said supply chain grunts that had constrained U.S. inventories were largely down originally.
Nike earned 87 cents per share for the three months ending February, down 3.3% from a year ago but well ahead of Street’s consensus forecast of 71 cents. Group revenue climbed 5% to $10.87 billion, Nike said, on strong demand in the United States that offset an 8% drop in Covid-hit China.
Reviewing the final months of its fiscal year, Nike said that with all of its Vietnam-based factories operating, “we’re going to start to see improved supply flow” in North American markets, even though the shipping lead times remain high due to inland transportation issues, thanks to global demand that “significantly” exceeds inventory levels.
“Market demand continues to outpace available supply as inventory supply begins to normalize in the fourth quarter, amid a healthy attractive market, setting the stage for another year of strong growth,” Chief Financial Officer Matthew Friend told investors on a conference call late Monday. . “We are focusing on what we can control as there are several new dynamics creating higher levels of volatility.”
“As a result, we will provide more specific financial guidance for FY23 during our fourth quarter earnings call,” Friend added.
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Shares of Nike rose 5.9% in premarket trading to point to an opening price of $137.90 each, a move that would trim the stock’s year-to-date decline to around 16.25%.
Sales in North America rose 9% to $3.88 billion, Nike said, thanks to its continued push towards the consumer, and although sales in China fell 8% from the last year, the decline was significantly better than expected and still generated solid turnover. of $2.16 billion.
Equipment sales were up 36% year over year, apparel was up 12% and branded footwear was up 5%.
“Overall, the quarter was positive, with strong sequential acceleration across Nike’s business and many of the most important macroeconomic components of the ‘wall of worry’ improving during the quarter. “said Michael Binetti, an analyst at Credit Suisse.
“The implied guidance (fourth quarter earnings) is very broad and the lack of guidance for FY23 still needs to be mitigated on the fourth quarter call, but overall we were very encouraged by Nike’s ability to to operate in what was probably the toughest macro quarter since COVID began,” he added.