Nike surpassed Wall Street’s earnings and revenue estimates for its third fiscal quarter, but its stock dropped over 10% after the retailer warned that sales will fall for the rest of the calendar year, primarily due to an expected 20% decline in its key China market during the current quarter.
In Q3, NIKE, Inc. reported revenues of $11.3 billion, with wholesale revenues of $6.5 billion, a 5% increase.
For Nike’s fiscal fourth quarter, sales are expected to decline by 2% to 4%, and gross profit margins are expected to decrease by 25 to 75 basis points.
In a press release, Elliott Hill, President and Chief Executive Officer, NIKE, Inc. told investors, “This quarter we took meaningful actions to improve the health and quality of our business. The pace of progress is different across the portfolio and the areas we prioritized first continue to drive momentum. The work is not finished, but the direction is clear, our teams are moving with focus and urgency, and our foundation is getting even stronger to build the future of NIKE.”
,Matthew Friend, Executive Vice President and Chief Financial Officer, NIKE, Inc. told investors, “We delivered third quarter results in line with our expectations, and our teams continue to execute with discipline. Win Now actions will continue to impact results over the balance of the calendar year, and we remain confident in our ability to position the Company for profitable growth long-term.”
Sales in China fell 10% from the prior year, with digital sales down 21% and wholesale off by 13%.
“Greater China, too, will benefit from a more local approach and closer connection with the consumer on the ground,” Hill said on the earnings call. “We have become clearer on the structural challenges in China and the channel dynamics in the marketplace. We are taking action to clean the marketplace, tighten execution across digital and physical retail and rebuild the brand locally through sport.”
The latest results come as the sporting retailer undergoes a major turnaround under CEO Elliott Hill.
By CEO NA Editorial Staff
