- Nike stock advanced as much as 9% Tuesday after earnings for the fiscal second quarter beat views.
- Supply-chain constraints and factory closures impacted the sneaker giant, and strong consumer demand outpaced supply.
- The earnings report comes a week after Nike acquired virtual shoe studio RTFKT, signaling its bet on the metaverse.
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Nike stock traded as much as 9% higher Tuesday after fiscal second-quarter earnings and sales beat forecasts, despite COVID-19 obstacles and supply-chain constraints.
Late Monday, the iconic sportswear company reported adjusted earnings per share rose 6% to $0.83 as revenue edged up 1% to $11.36 billion, surpassing analysts' expectations of $0.63 and $11.26 billion, respectively.
"NIKE's strong results this quarter provide further proof that our strategy is working, as we execute through a dynamic environment," CEO John Donahoe said in press release. "We are now in a much stronger competitive position today than we were 18 months ago."
Shares pared gains and were up 6% at $166.39 by 11:24 a.m. ET. So far this year, Nike stock is up more than 17%.
In the second quarter, North America revenue grew 12% year over year, though sales in Greater China fell 20% due to low inventory levels.
Production dipped amid global supply-chain disruptions and factory closures related to the pandemic. In Vietnam alone, the company cancelled production on approximately 130 million units.
Company executives expect balance to eventually return to its supply and demand, though Nike still forecasts growth be in the lower single digits for the third quarter.
The earnings report comes a week after Nike acquired virtual shoe studio RTFKT, signaling its bet on the metaverse. The deal will extend the company's digital footprint and builds upon Nike's launch of "Nikeland," a free 3-D space inside the Roblox gaming platform.
On a call with analysts late Monday, Donahoe said the company will invest "to deliver next-generation experiences that involve RTFKT and Nike brands."