Shoppers, some with PPE (personal protective equipment), of a face mask or cover as a precaution against COVID-19, queue to enter a recently reopened Nike store at Gunwharf Keys Shopping Center in Portsmouth, southern England , on June 16. 2020.
Adrian Dennis | AFP | fake pictures
Even Nike, often praised as one of the strongest global brands in the retail industry, is taking a hit from the coronavirus pandemic.
The Portland, Oregon-based shoe maker reported an unexpected quarterly net loss and 38% year-over-year decline in sales Thursday as its business was affected by the temporary closure of its stores and revenue in line were not enough to compensate for that.
Its shares fell about 4% in off-hours trading.
Here’s how Nike did it during its fiscal fourth quarter:
- Loss per share: 51 cents
- Revenue: $ 6.31 billion
Nike reported a loss of $ 790 million, or 51 cents a share, during the period ended May 31, compared to a net income of $ 989 million, or earnings of 62 cents a share, a year ago.
Total revenue decreased 38% to $ 6.31 billion from $ 10.18 billion a year ago. Sales in North America decreased by 46%, while sales in China decreased by only 3%, and many of Nike’s stores in that region reopened earlier during the pandemic than in the US.
Digital sales soared 75%, accounting for about 30% of total revenue, as shoppers flocked to the Nike website to buy sneakers and training gear.
But shipping and return costs also put more pressure on the company’s bottom line. Nike’s margins during its fiscal fourth quarter decreased to 37.3% from 45.5% a year ago.
Analysts were asking the company to report earnings of 7 cents a share on revenue of $ 7.32 billion, according to Refinitiv data. However, the impact of the coronavirus pandemic makes it difficult to compare the company’s results with analyst estimates.
“We continue to invest in our greatest opportunities, including a more connected digital marketplace,” Chief Executive John Donahoe said in a statement.
At the close of the market on Thursday, Nike shares fell less than 1% this year. The stock rose approximately 22% from a year ago. Nike is worth $ 157.7 billion.
Read Nike’s full press release here.
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