Nike narrowly beat earnings expectations in its quarterly earnings report, after reporting pandemic-related supply chain challenges.
In its earnings report for the second quarter, the footwear giant posted just a one per cent increase in revenue from a year before. It put this down to supply chain issues, including “lower levels of available inventory” because of Covid-related factory closures in Asia.
“While closures had an impact across our portfolio, North America and EMEA delivered growth due to higher levels of in-transit inventory entering the second quarter,” the company added.
The retailer posted an adjusted earnings per share (EPS) of $0.83 on revenue of $11.36bn.
Analysts had anticipated an adjusted EPS of $0.63 on revenue of $11.26bn, according to a poll from Bloomberg.
“Nike’s strong results this quarter provide further proof that our strategy is working, as we execute through a dynamic environment,” Nike president and CEO John Donahoe, said.
“We are now in a much stronger competitive position today than we were 18 months ago.”
Covid restrictions in Vietnam resulted in the retailer cancelling the production of around 130m units.
The brand was “increasingly confident supply will normalise heading into fiscal 2023,” Nike’s finance chief, Matthew Friend, told journalists on a conference call, the Wall Street Journal reported.
All factories in Vietnam were operational with production at about 80 per cent of what it was pre-closures, Friend said.