Nike reports 38% fall in sales in last quarter
Nike has reported that sales fell 38% in the latest quarter, as mass closures of physical stores amid the coronavirus pandemic overshadowed surging demand online.
Chief Executive John Donahoe told reporters that Nike has reopened most of its stores globally and benefited from its digital apps and online sales, which grew 75% and cushioned the overall decline.
Nike continued to pay its workers during the closure and doubled down on digital sales while consumers were confined to their homes.
Nike said roughly 85% of its stores were open in North America, with roughly 90% of stores open in Europe, Middle East and Asia, and about 65% of stores open in the Asia, Pacific and Latin America regions.
The company will now continue to focus on expanding its digital business and on plans to open between 150 and 200 small-format stores with merchandise that reflects the preferences of customers in the local area.
Even with the boost from online shoppers, sales in the latest quarter fell to $6.31 billion (£5.1 billion) from the year-earlier quarter, with shares of Nike reportedly falling nearly 4% in after-hours trading.
Nike swung to a loss of $790 million (£636.5 million), or 51 cents a share, from a profit of $989 million (£796.85 million), or 62 cents a share, a year earlier.
The loss could be attributed to lower revenue and reduced gross margins that fell because of higher product costs, increased inventory reserves and adverse effects on supply chain costs.
Acknowledging the impact of the virus on the business, the company said it wouldn't provide an outlook for this year because of continuing uncertainty.
Nike released its fiscal 2020 financial results for the third quarter in March, with the company reporting that revenues rose 7% on a currency-neutral basis.