NKE Nike Inc

By Khadeeja Safdar and Kimberly Chin 

Nike Inc. joined a growing list of U.S. companies getting squeezed by global supply-chain disruptions stemming from the Covid-19 pandemic.

The sneaker giant on Thursday reported quarterly revenue that was below analysts' expectations, saying sales were hindered by a global container shortage and congestion at West Coast ports that delayed the flow of inventory by more than three weeks. The company said it expects to capture the missed revenue in the current quarter.

"While we are optimistic about the pace of vaccine distribution and how this will enable safe reopening of the global economy in the near future, the effects of the virus continue to create short-term volatility in our business performance," finance chief Matthew Friend said on the company's earnings call.

Nike's fiscal third-quarter revenue was $10.36 billion, a 2.5% increase from a year earlier. On a constant-currency basis, North American revenue declined 11%, while revenue in Greater China grew 42%

Nike shares fell about 3% after hours.

Supply-chain issues have hit makers of everything from cars and clothing to fitness equipment and medical needle containers, as port backlogs and weather disruptions have complicated meeting strong consumer demand driven by the pandemic.

Nike said its direct sales, which rose 20% to $4 billion in the quarter, somewhat offset the shipping problems. Meanwhile, digital revenue increased 59%, with the company saying digital revenue in North America hit $1 billion for the first time.

In the early months of the pandemic, Nike closed stores and continued to pay its workers, but doubled down on digital sales as consumers were confined to their homes. On Thursday, the company said it is still experiencing the impact of the virus from safety-related measures and lockdowns in some regions.

Before the pandemic hit, the sportswear giant had been beefing up its direct-to-consumer business through its own website and stores.

In 2019, it parted ways with Amazon.com Inc. and cut back on the number of stores selling its goods. It also had been investing in apps for shopping, selling sneakers and guided workouts.

For the fiscal third quarter, which ended Feb. 28, Nike had earnings of $1.45 billion, or 90 cents a share, compared with $847 million, or 53 cents a share, a year earlier.

Write to Khadeeja Safdar at khadeeja.safdar@wsj.com and Kimberly Chin at kimberly.chin@wsj.com

(END) Dow Jones Newswires

March 18, 2021 18:35 ET (22:35 GMT)

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