Nike (NKE) shares are up 7% in premarket trading after the sneaker retailer’s fiscal third-quarter results topped analysts’ expectations due to strong North American demand.
Given its global footprint, Nike is serving as a bellwether of how other retailers are managing challenges such as elevated oil prices, inflation, crippled supply chains, and global unrest driven by Russia’s invasion of Ukraine.
Nike’s China business is also on watch. A boycott among Chinese consumers toward Western brands caused Nike’s sales to take a hit last year, and it’s still in recovery mode. Nike has prioritized North America, its biggest market, over China during the pandemic when supplies have been tight.
Still, despite the challenges, Nike reported that its sales in North America climbed 9% year-over-year.
Nike reported net income for the three-month period ended February 28 of $1.4 billion U.S., or $0.87 U.S. per share, compared with $1.45 billion U.S., or $0.90 U.S. a share, a year earlier. That topped profit estimates for $0.71 U.S. per share, according to Refinitiv data.
Sales rose 5% to $10.87 billion U.S. from $10.36 billion U.S. a year earlier, beating analysts’ expectations for $10.59 billion U.S. in revenue.
For its current fiscal year, Nike reiterated its expectations for sales to grow mid-single-digits from the prior 12-month period. Analysts had forecast revenue to be up 5.3%, according to Refinitiv data.
The better-than-expected results proved Nike’s ability to operate in a volatile environment, CEO John Donahoe said in a press release.
As of yesterday’s (March 21) market close, Nike shares were down 22% this year at $130.19.
