A man with a face mask walks past a Nike store in Central Business District, Beijing, China on February 17, 2020.
Andrea Verdelli | Getty Images
Nike shares fell Friday, after the company reported mixed earnings in the third quarter late Thursday, confirming that it was laying off employees.
The shares fell by almost 4% in the afternoon. The stock has risen more than 95% in the past year and has a market value of $ 217 billion.
Nike did not announce the reduction in positions in its earnings report on Thursday or call investors. The layoffs were first reported by The Oregonian, which covers the sneaker business in Portland.
Nike said the cuts follow layoffs that began last summer. As of May 31, 2020, Nike employed approximately 75,400 employees worldwide, according to a filing with the Securities and Exchange Commission.
In a prepared statement, Nike “focused on shifting resources and creating capacity to reinvest in our largest potential growth areas.”
“We are building a flatter, faster business and transforming Nike faster to define the market of the future.”
The athletics trader said Thursday its revenue fell 10% annually in North America during the fiscal third quarter to end-February 28, as backward ports delayed shipping. This has led to merchandise arriving late in its own stores and those of its wholesale partners, such as department stores and sporting goods stores, and increasing the risk of it ending up on the clearing shelf.
Nike said sales in its stores in Europe, the Middle East and Africa fell during the quarter due to pandemic-related closures and restrictions.
“The good news here is that supply chain issues should subside in the coming quarters, while Europe will open in time as the vaccine is rolled out further,” Jefferies analyst Randal Konik said in a research note. Konik rates Nike shares with a price target of $ 140.
Nike has highlighted highlights such as the growth of its direct-to-consumer business, momentum in China and strong online sales. The company said it achieved $ 1 billion in online sales in North America in the first quarter, while consumers picked up new sneakers and workout clothes during their home business. Sales in Greater China increased by 51%. And the company said it expects a similar revival of sales as other countries recover from the pandemic.