NIKE LOST $790 million in the fourth quarter, as soaring digital sales couldn’t make up for the loss of revenue from shut- tered stores in most of the world.
The world’s largest sports apparel maker said Thursday that its revenue fell 38% to $6.31 billion in the three-month period ending May 31.That was well below the $7.26 billion in revenue expected by Wall Street analysts, according to a survey by Zacks.
Nike Global post loses of $790Mn
– Revenue fell 38% to $6.31 bn in the quarter ending May 31
– Quarterly loss amounted to 51 cents per share
– Nike said 90% of its stores in North America, Europe, Latin America were closed during the period
The Beaverton, Oregon-based company’s quarterly loss amounted to 51 cents per share. Analysts had expected a profit of 2 cents a share.
Nike said 90% of its stores in North America, Europe, Latin America were closed during the period because of the coronavirus pandemic. Sales fell 46% in both North America and Europe but just
3% in China as stores reopened there. Rev- enue grew 1% in China when accounting for currency fluctuations.
The company grappled with costs asso- ciated with reducing built-up inventory, including wholesale markdowns and fac- tory order cancellations. Product ship- ments to wholesale customers fell 50% during the period. Chief Financial Officer Matthew Friend said the company expects its inventory,which rose 30% in the fourth quarter, to be right-sized by the end of the second quarter.
Nike said about 90% of its directly owned stores are now open worldwide, including all of its stores in China.
A bright spot for Nike throughout the pandemic has been a rise in digital sales, which analysts say positions the company to emerge strongly from the crisis over the long-term. Nike has aggressively invested in its direct-to-consumer digital platforms in the past few years.
Nike and Indian cricket team’s jersey has become synonymous over the last 14 years. But Nike who has been the KIT-PARTNER for the Indian cricket since 2006 is unlikely to continue at the current levels of the deal. The current deal for 4 years between BCCI and NIKE is due to end on September 2020. And according to the information available with InsideSport, the brand is unlikely to renew the deal at the existing levels.
NIKE’S 4 Year deal for Indian Jersey with BCCI is worth 370 Crores
According to the info with InsideSport, Nike had pledged Rs 370 crores to renew the kit sponsorship with the Indian team in 2016. As per the contract Nike pays 87.34 lac per game currently.
But due to the current economic downturn and continuously plummeting sales – Nike is not ready to commit the same amounts to BCCI for the next cycle. InsideSport has also reliably learnt from its sources in BCCI, that the brand has already communicated this to the Indian board.
That is the reason, BCCI is likely to announce the fresh tenders in case the incumbent fails to match the current offer.
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