On Thursday, Nike reported an unexpected quarterly net loss. Moreover, sales declined by 38% year-over-year. The coronavirus pandemic caused a lot of problems for the companies and the world-famous sneaker maker is not an exception.
Oregon-based company is often described as one of the strongest global brands in the retail industry. However, even for Nike, it is not easy to deal with the economic impact of the coronavirus pandemic. Importantly, its business was hurt from its stores being shut temporarily. Unfortunately, online revenue was not enough to solve all issues.
Moreover, not only Nike but its wholesale partners closed their shops due to restrictions. Let’s have a look at how well the company adapted to the new reality.
Nike and interesting details
In the fourth fiscal quarter, Nike reported a net loss of $790 million or 51 cents per share. As a result, compared to the same period in 2019 the company suffered heavy losses. Last year, Nike reported a net income of $989 million or earnings 62 cents per share. Importantly, the quarter ended on May 31.
Moreover, total revenue fell 38% to $6.31 billion from $10.18 billion a year ago. Interestingly, sales in North America dropped by 46%. However, sales in China were down just 3%.
It is worth noting that, sales at the Converse brand fell 38%. Nevertheless, sales at the Nike brand, footwear sales decreased by 35%. Moreover, in the case of apparel sales fell 42% and equipment revenue plunged 53%.
Hopefully, digital sales jumped 75% and reached 30% of the total revenue. Notably, the company wanted to reach this goal by 2023. However, due to the coronavirus pandemic, more people bought sneakers and workout gear. The company wants to increase its e-commerce sales in the foreseeable future as it plans to sell 50% of products by using this method.
Importantly, Nike is not offering a complete fiscal 2021 outlook at the time. According to the company’s CEO John Donahoe, the revenue should be flat-to-up compared with the prior year.
COMMENTS