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Investing.com — Nike Inc (NYSE:NKE) beat expectations for revenue and profit in the third quarter on double-digit gains in sales.
The footwear and apparel maker reported profit of 79 cents a share and revenue of $12.4 billion. Analysts expected third-quarter earnings of 56 cents a share and revenue of $11.48B. Revenue was up 14% from the same period a year earlier.
Shares rose more than 3% after-hours and are up 7% so far this year. After rising, the shares turned lower in after-hours trading. They are down 1.5% in pre-market Wednesday.
The company said its NIKE Direct sales rose 17% to $5.3B, and its NIKE Brand Digital sales rose 20%.
CEO John Donahoe said the strong results “offer continued proof of the success of our Consumer Direct Acceleration strategy.” He added: “Fueled by compelling product innovation, deep relationships with consumers and a digital advantage that fuels brand momentum, our proven playbook allows us to navigate volatility as we create value and drive long-term growth.”
In China, Nike said revenues, as reported, fell 8% but rose 1% on a currency-neutral basis despite challenges in December after the country’s shift on COVID-19 policies.
Gross margin decreased 330 basis points to 43.3%, largely because of discounting to sell inventory, higher product input costs, and unfavorable currency changes. Some of this was offset by strategic pricing actions, Nike said. Selling and administrative expenses rose 15% to $4B.
Oppenheimer analysts weighed in positively on Nike’s report.
“In our view, a modest decline in NKE shares, after market, is at odds with broadly solid and well above plan trends at the company,” they said in a note.
Bernstein analysts also reflected positively as the company used Q3 to clear the decks.
“We expect both GM and China to inflect nicely in FY24, and maintain our positive outlook,” they said.
