Nike profit up, but revenue falls short of expectations as congested U.S. ports delayed shipments

FILE PHOTO: A Nike store is shown at at outlet mall in San Clement, California, U.S., November 24, 2020. REUTERS/Mike Blake

(Reuters) – Nike Inc’s third-quarter profit gained but revenue fell short of Wall Street estimates on Thursday, as it grappled with supply chain problems in North America and a slump in sales at brick-and-mortar stores that were shut due to the COVID-19 pandemic.

The world’s largest sportswear maker said revenue rose to $10.36 billion from $10.1 billion, while analysts on average had expected $11.02 billion, according to IBES data from Refinitiv.

Nike’s net income nonetheless climbed to $1.45 billion, or 90 cents per share, in the third quarter ended Feb. 28, from $847 million, or 53 cents per share, a year earlier. Analysts were expecting earnings of 76 cents.

U.S. container-freight traffic has slowed significantly in recent months due to COVID-19 outbreaks among dockworkers and safety restrictions aimed at stemming the spread of the virus. At the same time, ports are dealing with a cargo surge due to pandemic-led demand for bulk products.

Revenue fell 11% on a currency-neutral basis in North America, where container shortages and U.S. port congestion held up inventory by more than three weeks and delayed shipments to retailers.

Nike shares were down 1.2% in post-market trade.

In Europe, the Middle East and the Africa region, 45% of Nike-owned stores were closed for parts of the last two months of the quarter. Currently, 65 percent of stores in EMEA are open or operating on reduced hours, Nike said.

Rival Adidas said last week that it has reopened 95% of its stores after coronavirus lockdowns.

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