Nike's Latest Financial Report Shows 38% Drop in Quarterly Revenue

While seeing a 75 percent increase in online sales.

By
Footwear 
6,620 Hypes 2 Comments

Nike has just released its final financial report for its 2020 fiscal year, showing a 38 percent drop in revenue in Q4 ending May 31, and an overall 4 percent drop to $37.4 billion year-over-year to close out all four quarters. This follows from a positive 9 percent revenue report in the first half of its 2020 fiscal year, prior to COVID-19.

In summary, Nike has reported the following reasons for this decline, mostly pertaining to the widespread of coronavirus in Q4:

  • Nike-owned physical store closures globally: “90 percent of NIKE-owned stores were closed for roughly eight weeks in the quarter to protect the health and safety of teammates and consumers and help slow the spread of the COVID-19 pandemic.”
  • Nike-partner stores generally followed suit, which saw a decrease of nearly 50% in wholesale shipments, resulting in “lower total revenue and higher inventory.”
  • While wholesale discounts were offered to encourage retailer spending, Nike’s gross margins saw a 45.5 percent to 37.3 percent drop year-over-year as it was met with higher production costs, including “factory cancellation charges, increased inventory obsolescence reserves… the adverse rate impact of supply chain fixed costs on lower wholesale shipments” and increased expenditure for shipping and returns.

It is also important to note however, that these factors were partially offset by growth in Greater China, which saw a revenue increase of 8 percent for the full 2020 fiscal year, or 11 percent on a currency-neutral basis, “marking its sixth consecutive year of double-digit currency-neutral growth despite the headwinds from COVID-19.”

A good takeaway for Nike, which has been seen in almost every other industry and business, is the soaring increase in online focus. Digital sales increased by 75 percent for the sportswear giant in Q4, accounting for 30 percent of the quarter’s total revenue; and an overall increase of 47 percent for the whole fiscal year. CNBC writes that Nike “had previously set a goal to reach 30 percent digital penetration by 2023. But that timeline was accelerated rapidly because of the pandemic. Now, the company said it is targeting its e-commerce sales accounting for 50 percent of overall sales ‘in the foreseeable future.’”

Presently, about 90 percent of Nike-owned stores around the world are open, a number that accounts for an approximate 100 percent rate in China, 85 precent rate in North America and 65 precent rate in APLA.

Visit Nike’s investor relations platform to read the full report.

For more business-related news, Chanel says coronavirus impact will affect the luxury sector until 2022.

Read Full Article
Source
Nike, Inc.

Join Our Discussions on Discord

The HYPEBEAST Discord Server is a community where conversations on cultural topics can be taken further.

100 Users Online

What to Read Next

Sasquatchfabrix. Blends Japanese Tradition With Western Influences for FW20
Fashion

Sasquatchfabrix. Blends Japanese Tradition With Western Influences for FW20

Daisuke Yokoyama’s directional styling.

Buju Banton Drops First Album in a Decade, 'Upside Down 2020'
Music

Buju Banton Drops First Album in a Decade, 'Upside Down 2020'

Featuring guest appearances from Pharrell, John Legend, Stephen Marley and Stefflon Don.

Stain Shade Brings Color to Carhartt's Workwear Pieces
Fashion

Stain Shade Brings Color to Carhartt's Workwear Pieces

Created using ’90s-inspired hand-dyeing techniques.


Rowing Blazers and FILA Take It Back to the 1980s With SS20 Capsule
Fashion

Rowing Blazers and FILA Take It Back to the 1980s With SS20 Capsule

Delivering Tennis 88 sneakers, polos, shorts, and color-blocked tracksuits.

The Apple Macintosh M0100 Inspires GREEN HOUSE's Click Wireless Mouse
Tech

The Apple Macintosh M0100 Inspires GREEN HOUSE's Click Wireless Mouse

Reimaging the single-button design for modern times.

Guapdad 4000 and Denzel Curry Get Militant on New Track "Lil Scammer That Could"
Music

Guapdad 4000 and Denzel Curry Get Militant on New Track "Lil Scammer That Could"

Produced by James Delgado.

More ▾
 
Subscribe to our Newsletter

Gain access to exclusive interviews with industry creatives, think pieces, trend forecasts, guides and more.

By subscribing, you agree to our Terms of Use and Privacy Policy.

Help us serve you better

We appreciate your support in allowing HYPEBEAST ads, where we can share contents from the latest fashion, to those culturally relevant. In adding HYPEBEAST to your ad blocker's whitelist, ads on our sites will show while you continue to browse.

Help Support Us

We need ads to keep the lights on and to continue providing free news to our readers. We’d appreciate your support by whitelisting HYPEBEAST on your ad blocker. That way you can keep reading all the great stories for free.

If you have already whitelisted us, simply refresh this page. To find out how to whitelist us, click the button below.

Back

Add Us to Whitelist

We appreciate your support in allowing HYPEBEAST ads. Most ad blockers have similar whitelisting steps and settings. If you need assistance, please contact us.

Adblock Plus

  1. Click on the red ABP icon in the upper right corner of your browser.
  2. Click “Enabled on this site” to disable ad blocking for the current site. In Firefox click “disable on HYPEBEAST”.
  3. Refresh the HYPEBEAST page that you were viewing.

Adblock

  1. Click the AdBlock hand icon.
  2. Click “Don’t run on pages on this domain”.
  3. A new “Don’t run AdBlock on…” dialog may be displayed in the middle of the screen.
  4. Move the “Site” slider to the right. After that, click “Exclude”.
  5. Refresh the HYPEBEAST page that you were viewing.

uBlock

  1. Click the uBlock icon.
  2. Click the large blue “power” button in the menu that appears to whitelist the current website.
  3. Reload the HYPEBEAST page that you were viewing.

Firefox Browser

Firefox Tracking Protection may activate our whitelist notice, which can be disabled temporarily for a browsing session by clicking the shield icon in the URL bar and following the instructions.

Disconnect

  1. Click the Disconnect icon.
  2. Click “Whitelist site”.
  3. Refresh the HYPEBEAST page that you were viewing.