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Nike (NYSE:NKE) jumped after reporting FQ3 results ahead of the consensus marks of analysts.
A drop in revenue in Greater China (-5%) was more than offset by gains in Asia Pacific & Latin America (+11%), North America (+9%) and Europe, Middle East, & Africa (+7%). Footwear sales were up 2% to $6.51B, while apparel sales rose 9% to $2.97B. Nike Direct sales rose 15% during the quarter to $4.6B and were up 17% on a currency-neutral basis.
Gross margin came in at 46.6% of sales vs. 46.5% consensus and 45.6% a year ago. Margin expansion in the Nike Direct business driven by lower markdowns, changes in foreign currency exchange rates and a higher mix of full-price sales were partially offset by lower full-price product margins largely due to increased freight and logistics costs.
Net income fell 4% year-over-year to $1.4B.
Nike (NKE) ended the quarter with inventory up 15% Y/Y to $7.7B, driven by elevated in-transit inventories due to extended lead times from ongoing supply chain disruptions, partially offset by strong consumer demand during the quarter.
Shares of Nike (NKE) rose 4.69% in after-hours trading to $136.29 vs. the 52-week trading range of $116.75 to $179.10. The stock was tracking toward its worst quarter since 2008 before the earnings release.
Nike (NKE) is on Seeking Alpha’s Catalyst Watch this week.
