(Reuters) -Nike Inc beat estimates for third-quarter revenue and profit on Tuesday, boosted by strong demand for its sneakers as consumers snapped up newer franchise launches and classic styles such as Jordan Retro in North America and Europe.
The company has benefited from higher sales of its franchises such as LeBron helping grow its market share, while rival Adidas struggles with its split with Kanye West and the German company is expected to post its first annual loss in three decades this year.
Beaverton, Oregon-based Nike has also seen a boost to sales from consumers especially at the higher end of the income rung who have shrugged off a hit from stubbornly high inflation, helping the company maintain a pandemic-induced boom in demand for athletic wear.
Still, the company’s shares fell about 1% to $124.30 in extended trading after gross margins in the third quarter decreased 330 basis points to 43.3%, pressured by a strong U.S. dollar and the company’s efforts to offer steeper discounts in an attempt to get rid of excess inventory.
Nike reported a 27% jump in sales in its largest market, North America, while it saw a 17% rise in the Europe, Middle East and Africa region in the third quarter ending Feb. 28.
Sales in Greater China fell about 8% even as the country eased pandemic-related restrictions, which is expected to benefit the company in the near term.
However, analysts have said Nike has banked heavily on the Chinese market, its most profitable, for growth in recent years, with the company significantly outperforming Adidas in the region.
Nike’s revenue rose 14% to $12.39 billion in the third quarter beating estimates of $11.47 billion, according to IBES data from Refinitiv.
The company posted a profit of 79 cents per share, above estimates of 55 cents.
(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Shounak Dasgupta)
