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Nike Says It Has Resolved Manufacturing Issues As Its Sales Jump


22/03/2022


Nike Says It Has Resolved Manufacturing Issues As Its Sales Jump
Sports apparel maker Nike Inc has announced that it has managed to resolve the manufacturing challenges that had hampered the company’s sales in recent months which has allowed the company to capitalise on rising demand for sports shoes and gear.
 
In extended trading, shares of the world's largest sportswear company gained 5.9 per cent to $137.90, beating revenue and profit forecasts for the third quarter.
 
Last year, pandemic related factory closures in Vietnam, where roughly half of Nike's footwear is made, and the country's tardy restoration to regular production caused a worldwide shortage of Nike, Jordan, and Converse sneakers.
 
According to Nike's Chief Financial Officer Matthew Friend, all Nike plants in Vietnam are now functioning, with total footwear and apparel output matching pre-closure levels.
 
However, shipping delays continue to be a source of concern for Nike, particularly in North America, where delivery times have gotten worse, according to Friend.
 
In the third quarter, the company's revenue in North America increased by 9%, thanks to continued pandemic demand for athletic clothing, the return of school sports, and price hikes.
 
"As people returned to some sort of new normal, that still has involved a lot of outdoor activities like trail running, golf and tennis," said Jessica Ramirez, retail analyst at Jane Hali & Associates.
 
Nike was compelled to prioritise sending its limited supplies to North America over the Chinese market, and revenue in Greater China plummeted 8% in the third quarter.
 
The impact of a new increase in COVID-19 cases in China on the company's fourth-quarter performance is unknown, according to the company.
 
According to IBES data from Refinitiv, Nike's revenue increased 5 per cent to $10.87 billion in the quarter ended Feb. 28, compared to analysts' expectations of $10.59 billion.
 
The company earned 87 cents per share on an adjusted basis, exceeding projections of 71 cents per share.
 
(Source:www.rte.ie)