As Nike starts to reopen its stores, the athletic powerhouse revealed today that it expects the coronavirus to have a material impact on its fourth-quarter business in North America, Europe and Asia.
In a statement, the company said the extent of the coronavirus’ impact on its operational and financial performance remains uncertain. It added that it would provide additional updates during its Q4 earnings call. (The date for the call has not yet been confirmed.)
As of today, Nike said 5% of its owned stores in North America, 40% in Europe and 15% in Asia are open. The company also shared that its store reopening plan is underway in more than 15 countries including Germany, France, the Netherlands, Brazil and the United States, and that its wholesale partners in these countries have also begun to reopen stores.
What’s more, the Beaverton, Ore.-based brand said that all of its doors and more than 95% of its partner stores are open in Greater China and South Korea. It described its retail traffic as “progressing” and made note that, although traffic at its physical stores is below what it was last year, losses are largely offset by continued strength in digital demand.
“We are encouraged by the recovery we are seeing in Greater China and South Korea as we continue to deepen our connection to consumers. Even more so, consumers around the world are recognizing the need for an active and healthy lifestyle and sport is now more meaningful than ever,” Nike president and CEO John Donahoe said in a statement. “With our strong digital foundation, brand momentum and financial position, we believe this will be a catalyzing moment that strengthens Nike’s longterm future.”
As Nike anticipates its own sales challenges, some of its competitors have also recently revealed the sizable impact of the coronavirus crisis on their businesses. Under Armour, for instance, posted mixed first-quarter earnings on Monday, with footwear sales for the three-month period ended March 31 dropping 28% to $210 million, apparel sliding 23% to $598 million and accessories revenues dipping 17% to $68 million. Adidas said this month that its net income for the first quarter plummeted 97% to 20 million euros ($21.69 million at current exchange), with earnings of 13 pence (14 cents) per share. Revenues also decreased 19% to 4.75 billion euros ($5.15 billion). (It also warned of an even bigger hit in the next quarter.) Since the start of the year, Adidas’ stock fell nearly 32% to $110.64.
In its last earnings report on March 24, Nike revealed a revenue improvement of 5% on a reported basis (or 7% on a currency-neutral basis) to $10.1 billion for the period ended Feb. 29 — advancing past Wall Street’s predictions of $9.8 billion — with digital sales increasing 36% over the previous year.