NEW YORK – Nike had losses of $ 790 million in its last accounting quarter due to the drop in revenue from the closure of stores in most of the world.
The company said its revenue plunged 38% to $ 6.31 billion in the quarter that ended May 31. The figure is well below the $ 7.26 billion that Wall Street analysts had forecast, according to a Zacks study.
The loss equals 51 cents per share. Analysts had forecast a profit of 2 cents a share.
Nike said 90% of its stores in North America, Europe and Latin America were closed this period due to the coronavirus pandemic. Sales were down 46% in North America and Europe and just 3% in China, where stores were reopened. Revenue increased 1% in China after considering currency fluctuations.
The company has faced costs associated with reducing inventories, such as sales to wholesalers and cancellations of factory orders. Product shipments to wholesale customers plummeted 50% in this period. Chief Financial Officer Matthew Friend said the company expects its inventory, which increased 30% in the last quarter, to normalize at the end of the second quarter.
Nike said around 90% of the stores it owns directly are already open in the world, including all the stores it has in China.
A positive aspect for Nike during the pandemic has been the increase in its digital sales, which, according to analysts, positions the company for a strong revival after the crisis.
Nike noted that digital sales increased 75% in its last quarter and accounted for 30% of total revenue. Friend said he is confident that digital sales will represent 50% of Nike’s revenue in the near future.
Nike shares fell nearly 4% to 97.50 in transactions after the close of the exchange.
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