Nike Inc., American multinational footwear, apparel, and equipment company has reported a drop in its quarterly sales figures owing to shipping-related problems as well as a sales slump in its retail outlets. Sources revealed that investors were not pleased with the annual revenue forecast of the world’s largest supplier of sports shoes and apparel.
Nike’s forecast for annual revenue growth of its ‘low-to-mid teens segment fell just short of the 15.9% hike in sales revenues as compared to estimations. As a result, Nike shares also fell by around 3% in the post-market trading session.
Chief Investment Officer and Director of Research at Tigress Financial Partners, Ivan Feinseth reportedly said that analysts had too many hopes set on Nike’s performance and were raising earnings and revenue expectations into the quarter.
Notably, the company’s sales rose from USD 10.1 billion to USD 10.36 billion, while market specialists predicting Nike’s revenues to touch USD 11.02 billion.
Nike further revealed that revenue from North America fell by 11% on a currency-neutral basis due to container shortages. Port congestions in the U.S. have further delayed inventory by over three weeks, the company claimed.
Chief Financial Officer of Nike, Matthew Friend said that the company expects to make up for lost revenue during the fourth quarter of 2021.
U.S. container-freight traffic has slowed down due to the COVID-19 outbreak among laborers, further resulting in safety restrictions enforcement to curb the spread of the virus. Meanwhile, the ongoing pandemic has also led to increased demand for bulk, leading to a surge in cargo quantities.
Regardless, Nike’s net income increased to USD 1.45 billion during the third quarter of 2020, which was a significant growth from USD 847 million, or 53 cents per share. However, analysts had forecast earnings per share of 76 cents last year.
Meanwhile, Nike’s rival company Adidas AG has also announced that 95% of its stores have been reopened after coronavirus lockdowns.
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