Nike revenue plunged 38% due to shutdowns, but online sales jumped 75%

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Footwear giant Nike (NYSE: NKE) released its fourth-quarter earnings results on Thursday. The company reported a surprise loss of $790 million due to store closures across North America and other parts of the world and the revenue fell 38% to $6.31 billion in the three-month period ending May 31 compared to the same quarter last year. In North America, the company’s biggest operating region, revenues plunged 46 per cent to $2.2 billion but just 3% in China as stores reopened there.
  • Earnings per share (EPS) $-0.51 vs. $0.7 expected
  • Revenue $6.31 billion vs. $7.32 billion expected
The gross margin declined 820 basis points to 37.3% due to increased inventories, factory closures and other costs associated with the pandemic crisis. One bright spot was increasing digital sales; the sales increased 75%, representing about 30% of total revenue and digital sales at the brand also increased by 47% for the entire year to $5.5 billion. According to the company, the Nike e-commerce app has been downloaded 8 million times since February. And the other good news is, the company said about 90% of its directly owned stores are now open worldwide, including all of its stores in China.

“The global pandemic has made it clear that consumer behavior is changing rapidly, providing us the opportunity to accelerate the pace of our digital acceleration,” Chief Executive John Donahoe said in a statement. “We are continuing to invest in our biggest opportunities, including a more connected digital marketplace,” he added.

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On Thursday the $NKE rallied approximately 3% ahead of the earning while the stock slipped 3% after the market close. On Friday at the time of writing, the Nike shares trading around $97, 4% lower.

Read more- https://gulfbrokers.com/en/nike-revenue-plunged-38-due-to-shutdowns-but-online-sales-jumped-75
 
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