Brandon Steiner shares his thoughts on Nike’s success, Yeezy’s failures and the Wall Street trading trends
Nike on Thursday reported mixed earnings for the third quarter as the retailer was hit by the congestion of the US port, global shortages of containers and the closure of stores in Europe due to pandemic, while the business that stays directly with the consumer increases revenue .
Nike increased its revenue by 2.5% compared to a year ago with an increase of $ 10.36 billion. The athletic outfit acknowledged in a statement that revenue performance was affected by disruption related to the Covid-19 pandemic.
Fortunately, before the pandemic changed the world, the Oregon-based company in Oregon began adding muscle to its business directly to the consumer. As a result, Nike’s armor has not shaken off the shutdown of the third-party brick-and-mortar retailer. Nike Direct – which owns both digital stores and a network of stores – recorded a 20% increase in sales, increasing to $ 4 billion. Its digital operations alone increased revenue by 59%
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“NIKE’s brand momentum is as strong as ever and we are driving focused growth against our biggest opportunities,” Nike chief financial officer Matt Friend said in a statement. “We still see the value of a more direct, digitally-activated strategy that fuels even greater potential for NIKE in the long run.”
Yet the company is not without its challenges.
North American revenue fell 10%, while Nike faced the same supply chain challenges – from the port shutdown to the shortage of containers – as other multinational corporations. In addition, retail sales in Europe, the Middle East and Africa (EMEA) declined, with about 45% of the stores owned by NIKE having mandatory COVID-19 closures in the last two months of the quarter. At present, about 65% of Nike’s EMEA stores are open and open in less hours.
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Overall, Nike showed a net income of $ 1.4 billion or 90 cents per share, compared to $ 847 million, or 53 cents per share, a year ago.
| Ticker | Safety | Last | Alter | Alter% |
|---|---|---|---|---|
| NKE | NIKE, INC. | 143.17 | -1.65 | -1.14% |
Nike also announced that it would resume share buybacks after halting its share buyback program last March to “maximize liquidity during the COVID-19 pandemic.” Prior to the temporary suspension of the repurchase program, a total of 45.2 million shares were repurchased for approximately $ 4 billion.
In the third quarter, Nike shareholders paid $ 434 million in dividends, an increase of 14% compared to the previous year.
Shares of Nike fell slightly on Thursday after the announcement of earnings.