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Nike profit up, but revenue falls short of expectations as congested US ports delayed shipments

Nike profit up, but revenue falls short of expectations as congested US ports delayed shipments

FILE PHOTO: A Nike store is shown at at outlet mall in San Clement, California, U.S., November 24, 2020. REUTERS/Mike Blake

REUTERS: Nike Inc's third-quarter profit gained but revenue fell short of Wall Street estimates on Thursday, as it grappled with supply chain problems in North America and a slump in sales at brick-and-mortar stores that were shut due to the COVID-19 pandemic.

The world's largest sportswear maker said revenue rose to US$10.36 billion from US$10.1 billion, while analysts on average had expected US$11.02 billion, according to IBES data from Refinitiv.

Nike's net income nonetheless climbed to US$1.45 billion, or 90 cents per share, in the third quarter ended Feb. 28, from US$847 million, or 53 cents per share, a year earlier. Analysts were expecting earnings of 76 cents.

U.S. container-freight traffic has slowed significantly in recent months due to COVID-19 outbreaks among dockworkers and safety restrictions aimed at stemming the spread of the virus. At the same time, ports are dealing with a cargo surge due to pandemic-led demand for bulk products.

Revenue fell 11per cent on a currency-neutral basis in North America, where container shortages and U.S. port congestion held up inventory by more than three weeks and delayed shipments to retailers.

Nike shares were down 1.2per cent in post-market trade.

In Europe, the Middle East and the Africa region, 45per cent of Nike-owned stores were closed for parts of the last two months of the quarter. Currently, 65 percent of stores in EMEA are open or operating on reduced hours, Nike said.

Rival Adidas said last week that it has reopened 95per cent of its stores after coronavirus lockdowns.

(Reporting by Praveen Paramasivam in Bengaluru and Richa Naidu in Chicago; Editing by Sriraj Kalluvila and Dan Grebler)

Source: Reuters

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