The coronavirus pandemic is a major problem for the global economy. Last week, the world-famous company reported an unexpected quarterly net loss. Furthermore, sales fell by 38% year-over-year. The coronavirus pandemic created additional pressure on the companies. As can be seen from the data provided by Nike, the company was struggling to deal with the economic impact of the coronavirus pandemic.
Nike is regarded as one of the strongest global brands in the retail industry. Nevertheless, even for the Oregon-based company, it is not easy to cope with the ongoing situation. Notably, its business was hurt from its stores being shut temporarily. Also, online revenue proved insufficient to solve all problems.
As a reminder, not only Nike but its wholesale partners closed their shops due to restrictions.
Nike and main findings
The fourth fiscal quarter ended on May 31. The company reported a net loss of $790 million or 51 cents per share. Consequently, compared to the same period in 2019 the company suffered heavy losses.
In 2019, Nike reported a net income of $989 million or earnings 62 cents per share.
Importantly, total revenue fell 38% to $6.31 billion from $10.18 billion a year ago. Moroever, sales in North America fell by 46%. Also, sales in China were down just 3%.
Sales at the Converse brand fell 38%. Also, sales at the Nike brand, footwear sales decreased by 35%. Furthermore, in the case of apparel sales dropped 42% and equipment revenue plunged 53%.
However, digital sales jumped 75% and reached 30% of the total revenue. However, it was not enough to solve all issues.
Nike wanted to reach this goal by 2023 but due to the coronavirus pandemic, more people bought sneakers and workout gear. Also, the company wants to increase its e-commerce sales in the foreseeable future as Nike plans to sell 50% of products.