Nike’s revenue down 38% in fiscal fourth quarter

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Published:  26 June, 2020
Nike classic CR7 range

The global sportswear manufacturer posted revenues of US$6.3 billion for the fourth quarter of its fiscal 2020, ended May 31, a decline from the prior year as the majority of Nike-owned and partner stores in North America, EMEA and APLA were closed due to the Covid-19 pandemic.

Revenues for Nike decreased 38% to US$6.3 billion, while gross margin

decreased 820 basis points to 37.3% as higher full-price average selling prices, despite increased wholesale discounts, were more than offset by higher product costs including factory cancellation charges, increased inventory obsolescence reserves and the adverse rate impact of supply chain fixed costs on lower wholesale shipments primarily due to Covid-19, according to the company. Nike digital sales are reported to have increased 75% in the fourth quarter, across all geographies, and represented about 30% of total revenue. Net loss in the quarter was US$790 million.

For the full fiscal year 2020, revenues fell 4% to US$37.4 billion, but were up 9% for the first half. Digital sales increased 47% in the year. Greater China revenues increased 8% in the period. Nike said gross margin decreased 130 basis points to 43.4%, and net income for the year was US$2.5 billion, with diluted earnings per share at US$1.60, down 36%.