Athletic footwear and apparel company Nike has reported better-than-expected fiscal second-quarter results despite global supply chain problems that have slowed deliveries.
Shares of Nike were up more than 3% in premarket trading after the Beaverton, Oregon-based company reported that its earnings per share (EPS) came in at $0.83 cents U.S. versus $0.63 U.S. that analysts had expected. Revenue came in at $11.36 billion U.S. compared to $11.25 billion U.S. that was expected.
Sales in North America, Nike’s biggest market, climbed 12% during the quarter, representing the highest growth of all geographies. Sales in Greater China fell 20%, while revenue in its Europe, Middle East and Africa region grew 6%.
Nike’s recovery in China has become a bigger focus for investors as the market remains key to the company’s future growth. Western brands have faced some backlash in China amid global tensions.
Nike said that fewer items were sold in China during the latest quarter due, in part, to lost production from the Vietnam factory closures and lower available inventory. Ongoing Covid-19 lockdowns in the country also made traffic patterns more volatile.
Nike also reported that its digital sales rose 12% year-over-year, while sales through Nike Direct were up 9%. The company has increasingly pulled its goods out of wholesale channels, such as discount stores, and is selling more shoes and workout gear through its own website and stores.
Last quarter, Nike slashed its revenue forecast for fiscal 2022 to account for longer transit times, labor shortages and prolonged production shutdowns in Vietnam, where Nike makes about half of all its sneakers.
Nike now says that, for the third quarter, it expects sales to grow at a low-single-digit rate from the year earlier, due to lingering effects from the Vietnam factory closures.
Nike shares are up 11% year-to-date, bringing its market capitalization to $248.5 billion U.S.
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