Nike takes $790 million loss in sales slump, even as China returns to growth
Nearly all of the footwear giant's retailing stores were closed for two thirds of the fiscal fourth quarter.
China, one of Nike's biggest markets, is growing again following a rare decline last quarter. But that rebound wasn't enough to save the footwear and apparel giant from reporting a sharp COVID-19-related global sales drop in the fiscal fourth quarter.
That period covers March, April, and May, and so it spanned the reopening of retailing in China and the maximum social-distancing efforts that followed in North America and Europe. Those moves pushed revenue down 38% for the quarter, Nike said on Thursday afternoon.
Sales in the U.S. market were down 46%, Europe was lower by 44%, and China notched a slight 1% uptick. The overall decline pressured gross profit margin and sparked significant inventory write-down charges. As a result, Nike posted a $790 million loss for the period.
Macy's jobs cut: Retailer trims 3,900 corporate jobs in restructuring due to COVID-19 impact on sales
Is your GNC closing?: See the list of first stores to shutter in retailer's bankruptcy.
Management stressed several positive takeaways from the crisis quarter, including surging digital demand and the return to growth in China. Nike is seeing retail traffic improve with each passing week at its reopened stores around the world, too. Those trends have executives expressing confidence that the fiscal fourth-quarter numbers will be an outlier in its broader growth story.
Demitrios Kalogeropoulos owns shares of Nike. The Motley Fool owns shares of and recommends Nike. The Motley Fool has a disclosure policy.
The Motley Fool is a Paste BN content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of Paste BN.
Offer from the Motley Fool: 10 stocks we like better than Nike
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Nike wasn't one of them! That's right -- they think these 10 stocks are even better buys.