Nike Ekes Out Growth on North American Demand

Sales at the world’s largest sports brand inched up to $11.4 billion in the quarter, driven by 12 percent growth in North America, Nike’s largest market. The results beat analysts’ expectations, sending Nike’s shares up more than 3 percent in extended trading.

Nike has faced ongoing turmoil in its supply chain after Covid-19 shuttered factories around Vietnam, where it manufactures 50 percent of its footwear, earlier in the year. On a call with analysts, Matt Friend, Nike’s chief financial officer, said the shutdowns led to 130 million production units being cancelled. The inventory shortage impacted sales in regions such as China, where sales fell 20 percent compared to the same time last year.

In North America, however, a large amount of inventory planned for the previous quarter was delayed and ended up being sold this quarter, letting Nike satisfy the healthy demand it saw and boosting its sales.

Nike also benefitted from strong sales online. Its digital business in North America was up 40 percent over last year. Nike has invested heavily in its own e-commerce channels and continues to draw more shoppers to its suite of apps, which it said were responsible for 40 percent of the digital demand it saw in the quarter.

Friend said he’s confident supply will normalise heading into fiscal year 2023. The company’s factories in Vietnam are all operational again and running at 80 percent of their pre-closure capacity.

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