Even with a 75 per cent spike in sales for the fourth quarter of the financial year 2019/20, American sportswear giant Nike has reported a 38 per cent drop in revenue for the period, to US$6.3 billion, due to the coronavirus pandemic.
In an article from online publication SportsPro, Nike further reported a quarterly loss of US$790 million — its worst performance since 2013, according to Bloomberg.
“In a highly dynamic environment, the Nike brand continues to resonate strongly with consumers all over the world as our digital business accelerates in every market,” the article quotes John Donahoe, Nike’s president and chief executive.
The news of the loss at the Oregon-based sportswear company came with an announcement that it would be laying off a portion of its staff.
Nike’s overall revenue for the year fell by 4.3 per cent when compared to a year ago, down from US$39.1 billion to $37.1 billion. The company’s net profit, which stands at US$2.5 billion, also declined comparatively to US$4 billion posted in 2019.
The company’s president and CEO, nevertheless, sought to assure shareholders that Nike still had the capacity to grow.
“We are uniquely positioned to grow and now is the time to build on Nike’s strengths and distinct capabilities. We are continuing to invest in our biggest opportunities, including a more connected digital marketplace, to extend our leadership and fuel long-term growth,” Donahoe shared.
A former eBay executive, Donahoe has been intent on shifting Nike’s business model from wholesale to digital direct-to-consumer sales since assuming leadership of the company in January.
In March, the sportswear manufacturer said it was forced to close approximately 90 per cent of its physical retail outlets across North America, Asia, Western Europe and due to the pandemic.
However, not only did the company’s e-commerce sales for the year increase 30 per cent, but its new app membership registration more than doubled during the fourth quarter to 25 million.
This channel, Donahue is confident, will account for half of all sales “in the foreseeable future”.