Nike shares fell 4% on Friday after an epidemic reversal in the previous quarter as supply chain problems prevented the product from reaching North America, its largest market.
The sportswear giant, which had a surprisingly strong growth in the previous quarter, released its Wall Street ratings with its latest results. Sales in the third quarter totaled $ 10.4 billion, well below analysts’ estimates of $ 11 billion.
Its revenues in Europe were also disappointing, in part because many shops there remained closed due to the epidemic.
Shares of Nike closed at $ 5.68, closing at $ 137.49 after trading on Friday. Shares rose 1.2% this year to Thursday.
Nike recovery is unequal worldwide. In China, where the virus has largely receded, sales are strong. In the quarter ended February 28, they jumped 51%, exceeding estimates. North American revenues fell by 10%, in part due to a lack of port congestion containers.
Shipping problems began in late December, with US West Coast port delays lasting three weeks. This led to late deliveries and a shortage of wholesale supplies. Inventory at Nike distribution centers fell by 20%, leaving so many products on the road.
Even in the face of declining sales, Nike’s profit exceeded estimates. The company gained 90 cents per share compared to the forecast of 76 cents. The gross margin was 45.6%, which is more than one percentage point higher than the estimate of 44.4%.
E-commerce has helped Nike overcome COVID-19 failure. Digital sales of its Nike brand grew by 59% in the last quarter, the company said, citing strong growth in each region.
“We continue to see the value of a more direct, digital strategy, boosting Nike’s even greater potential in the long run,” said Matt Friend, chief financial officer.
Blockchain has boosted e-commerce orders for many brands, but Nike has been particularly aggressive in moving its online sales channels to stores owned by its company rather than the retail partners it has used for decades.
But its strategy has had some concessions. In recent weeks, Nike has angered crawlers when Bloomberg Businessweek found out that the son of a high-ranking executive has a growing shoe resale business. Nike North America CEO Anne Hebert has left the company to be replaced by Sarah Mensa, who previously headed Asia-Pacific-Latin America.