By Uday Sampath Kumar
(Reuters) -Nike Inc said on Monday that manufacturing issues that hampered sales in the past six months are now behind us, allowing the company to take advantage of rising demand for athletic footwear and apparel.
Shares of the world’s largest sportswear manufacturer rose 5.9% to $137.90 in extended trading, as it also beat third-quarter revenue and earnings estimates.
Pandemic-related factory closures last year in Vietnam, where about half of Nike (NYSE:) shoes are made, and the slow return to normal production in the country led to shortages of Nike, Jordan and Converse sneakers in most markets.
All Nike factories in Vietnam are now operational, with total production of footwear and apparel in line with pre-closure volumes, said Matthew Friend, the company’s chief financial officer.
However, shipping delays were still a concern for Nike, especially in North America, where transit times have deteriorated, Friend added.
The company’s sales in North America increased 9% in the third quarter, helped by ongoing pandemic demand for sportswear, return of school sports and price increases.
“As people returned to some sort of new normal, there were still a lot of outdoor activities involved, like trail running, golf, and tennis,” said Jessica Ramirez, retail analyst at Jane Hali & Associates.
Greater China sales fell 8% in the third quarter as Nike was forced to prioritize shipping its limited supplies to North America over the Chinese market.
The company said it was unclear how a new wave of COVID-19 cases in China would impact its fourth-quarter results.
Nike revenue rose 5% to $10.87 billion in the quarter ended Feb. 28, while analysts had forecast $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.Disclaimer: Fusion Media would like to remind you that the data on this website is not necessarily real-time or accurate. All CFDs (Stocks, Indices, Futures) and Forex prices are not provided by exchanges but rather by market makers, and therefore prices may not be accurate and may differ from the actual market price meaning prices are indicative and not suitable for trading purposes . Therefore, Fusion Media does not bear any responsibility for any trading losses that you may incur as a result of using this data.
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