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Solid sales for Nike in the US and Europe helped offset pandemic-related challenges in China and the Asia-Pacific region during the second quarter, underpinning a result that beat the sportswear manufacturer’s forecast.
Nike said on Monday that it continued to deal with the effects of supply chain disruptions across the market, but CEO John Donahoe said the company as a whole had “a much stronger competitive position today than we had 18 months ago”.
These supply chain disruptions were most notable in Asia, where the US-based company reported that revenues in China and the Asia-Pacific region and Latin America decreased “largely due to lower levels of available inventory due to Covid-19-related factory closures” .
Although these closures had negative effects across the company’s portfolio, management said North America and Europe, the Middle East and Africa experienced growth due to “higher levels of inventory in the second quarter”.
Three months ago, Nike spoke of the “stable normalization” of physical retail when pandemic-time restrictions eased, but this was before the latest wave of measures taken by a growing number of countries in recent weeks to halt the spread of the Omicron coronavirus variant.
In total, Nike reported revenue of nearly $ 11.36 billion in the three months ended November 30. It was a 1 percent increase from a year ago, without regard to currency fluctuations, but came in about $ 100 million before what analysts predicted in a Refinitive survey.
Net profit of $ 1.34 billion, up 7 percent from a year ago, topped Wall Street’s median forecast of $ 1.01 billion.
Sales on Nike’s direct to the consumer channel increased by 8 percent from a year ago during the second quarter. It was led by North America, where the company said it had record sales for Nike Direct during the Black Friday week around the American Thanksgiving weekend.
Nike shares rose 4.8 percent in after-sales trading on Monday.