Apparel and sneaker maker Nike (NYSE:NKE) posted fiscal first quarter sales that missed Wall Street estimates as its production was negatively impacted by global supply chain disruptions and shipping delays.
Nike’s global sales for the quarter ended August 31 rose 12% to $12.2 billion U.S., missing analysts’ expectations of $12.5 billion U.S. This suggests that the world’s largest athleticwear company is having trouble keeping up with consumer demand for its products.
Nike is suffering from the same supply chain issues in Asia that are hurting trade around the world, from high container costs to lengthy transit times. It’s also dealing with factory closures in the production hub of Vietnam, where a resurgence in COVID-19 has led to new lockdowns.
Nike said inventories were at $6.7 billion U.S. for the quarter, flat from a year ago. While the company said demand was strong, it cited "elevated in-transit inventories due to extended lead times from ongoing supply chain disruptions."
Nike has gained steam in recent quarters as sports resumed, with fans packing stadiums and kids returning to playing fields. That’s driven demand for sneakers and apparel across regions.
Now the company faces the challenge of meeting consumer demand during the holiday months, which promises to strain global shipping channels even more.
Nike’s quarterly earnings rose to $1.16 U.S. a share, compared with estimates of $1.12 U.S.
Nike shares fell 0.7% to $158.41 U.S. in extended trading in New York following its earnings release. The stock is up 13% year-to-date.
