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Source: NIKE, Inc. Reports Fiscal 2020 Third Quarter Results
Revenues increased to $10.1 billion in the third quarter, up 5 percent on a reported basis and up 7 percent on a currency-neutral basis, driven by 13 percent currency-neutral growth in NIKE Direct with digital growth of 36 percent and strong growth across EMEA, APLA and North America, offset by the impact of COVID-19 on our business in Greater China. Digital sales in Greater China increased more than 30 percent while brick and mortar retail sales were impacted by temporary store closures related to COVID-19.
While every stock has reflected the ongoing problems in retail due to COVID-19 Nike continues to show considerable growth in digital and this has inspired trading to reflect an immediate spike after today’s report. In a recent post I made a statement that the brand is best prepared to rebound once retail returns to normal, but it’s evident that Nike has weathered the storm in their most important market, China, and they will begin opening doors there again. The U.S. is where Nike will take a second to rebound, but with the digital growth here it becomes apparent that the 36% growth in digital will allow Nike to continue to offset issues with COVID-19.
I engaged in a DM dialogue with an employee of Nike yesterday where they discussed internal problems and that those issues would be the only thing to slow down the Swoosh (diversity and sexism issues). I agree completely, but Nike’s decision to decrease accounts and control the market in a strategic fashion has contributed to a machine that is marching towards 45 Billion in the next few years. Even with outside turmoil such as the treatment of women athletes:
Nike is Bulletproof for this Reason Although Allyson Felix and Mary Cain Have Horrifying Stories
nothing disrupts Nike’s momentum. For the last two years Nike has had major problems internally. From the man who would be king in Trevor Edwards having to step down due to #Metoo, Nike seems bulletproof. That’s great news for shareholders; but in all honesty as beautiful as the Consumer Direct Offense is as a case study on large companies adapting to a more personalized consumer experience, the fact that the consumer (me included) looks beyond serious issues to continue strengthening the brand is problematic.
This post took a turn didn’t it?
You can read more about Nike’s Q3 2020 results by using the link at the lead of this post.