Nike negatively surprise as revenues drop by 790 million dollars in the quarter

Nike negatively surprise as revenues drop by 790 million dollars in the quarter

Nike negatively surprise. In the last financial quarter of the year, ended on 31st May 2020, the group, headquartered in Oregon, went through an unexpected decline, which turns out to be the first one over more than two years. Figures are much below estimates. At the end of the business year, Nike revenues amounted to 37.4 billion dollars, therefore decreasing by 4%.

A negative trend

At the end of the fourth quarter of the financial year, Nike earnings reached 6.31 billion dollars, therefore dropping by 38% at current rates of exchange and going down by 36% at fixed rates of exchange. Such downturn is mostly due to the closure of physical shops, controlled by the group, and partner stores, all over the world, because of the pandemic. It proves to be a heavy down, offset, to a limited extent though, by growing sales in China.

Net loss amounted to 790 million dollars. The US brand emphasized that “product deliveries off to wholesale stores have decreased by nearly 50%: consequently, overall revenues have declined and for-sale inventories have increased”. While speaking to analysts. The Chief Executive Officer John Donahoe has announced that the company aims to augment their online sales from 30%, in the fourth quarter, up to 50%.

The financial year

Nike also closed their annual financial year on 31st May 2020: earnings amounted to 37.4 billion dollars: –4% at current rates of exchange and -2% at fixed rates of exchange. Digital sales have been rising by 47%. Net profits reached 2.5 billion dollars. Stocks amount to 7.4 billion dollars, therefore increasing by 31% compared to the previous year. The last quarter performance has negatively affected the whole of such figures.

Picture taken from nike.com

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