Dhirendra Tripathi
Investing.com – A revenue miss in the February quarter, caused due to supply chain challenges, sent Nike (NYSE:NKE) shares down 2.5% down in Friday’s premarket trading.
The shoe and apparel maker’s revenues for the third quarter rose 3% to $10.4 billion, a miss of more than 5% from the consensus estimate of $11.02 billion, as per TipRanks. The company blamed this on supply chain challenges, including global container shortages and U.S. port congestion, affecting the flow of inventory and timing of wholesale shipments.
The shortage of containers and port congestion was particularly felt on North American operations, where revenues declined 11%.
In markets across Europe, Middle East and Africa, more than a third of the company’s stores are still shut, Nike said. That may stay the case in Europe in particular, where France and Germany are both experiencing a fresh and increasingly sharp rise in Covid-19 cases.
It wasn’t all bad as the company said it is now more confident in its full-year outlook for revenue and expects “low to mid-teens growth versus the prior year”. The company also expects gross margin expansion up to 75 basis points for the full year. One basis point is one hundredth of a percentage point.
Nike Direct, its direct-to-consumer initiative, also showed healthy growth. It rose 15% on a currency-neutral basis, led by Nike Digital growth of more than 50%. For the first time, online revenues from North American operations topped $1 billion.