(Reuters) – Nike Inc said on Monday manufacturing issues that had curtailed sales over the past six months were now behind it, positioning the company to capitalize on growing demand for athletic footwear and apparel.
Shares of the world’s largest sportswear maker rose 5.9% to $137.90 in extended trading as it also beat third-quarter revenue and profit estimates.
Pandemic-related factory closures last year in Vietnam, where around half of Nike’s shoes are made, and the country’s slow return to normal production led to a shortage of Nike, Jordan and other sneakers. Converse in most markets.
All Nike factories in Vietnam are now operational, with total footwear and apparel production in line with pre-shutdown volumes, the company’s chief financial officer, Matthew Friend, said.
However, shipping delays were still a concern for Nike, especially in North America where transit times have worsened, Friend added.
The company’s North America revenue rose 9% in the third quarter, helped by sustained pandemic demand for activewear, the return of school sports and price increases.
“While people were returning to a kind of new normal, it still involved a lot of outdoor activities like running, golf and tennis,” said Jessica Ramirez, retail analyst at Jane Hali & Associates.
Greater China revenue fell 8% in the third quarter as Nike was forced to prioritize sending its limited supplies to North America rather than the Chinese market.
The company said it was unclear what impact a further rise in COVID-19 cases in China would have on its fourth-quarter results.
Nike’s revenue rose 5% to $10.87 billion in the quarter ended Feb. 28, while analysts had expected $10.59 billion, according to IBES data from Refinitiv.
On an adjusted basis, the company earned 87 cents per share, beating estimates of 71 cents per share.
Reporting by Uday Sampath in Bangalore; Editing by Shounak Dasgupta