Corona crisis puts nike deep in the red

Corona crisis puts nike deep in the red

Closed shops due to the corona pandemic have brought the world’s largest sporting goods manufacturer nike deep into the red.

In the past fiscal quarter (to the end of may), the adidas rival reported a net loss of 790 million dollars (704 million euros) after the close of the u.S. Stock exchange on thursday. In the same period last year, nike had earned 989 million dollars.

Earnings slumped 38 percent to 6.3 billion dollars, mainly due to the pandemic-related closure of numerous stores around the world. Digital business with online sales grew by 75 percent, but this was not enough to compensate for the losses in the crippled retail sector.

The quarterly figures were significantly worse than analysts had expected. On wall street, sales of around 7.4 billion dollars and black figures had been expected. Investors reacted to the results with corresponding disgust, and the share price fell sharply in the aftermath.

In the meantime, however, the company says that the impact of the corona pandemic has already eased considerably. Around 90 percent of nike stores around the world have now reopened. The group is now betting that the strong momentum in online sales will continue, while the store business will pick up again with the end of the lockdown measures.

Now is the time to leverage nike’s particular strengths and resources, said chief executive john donahoe. "We are uniquely positioned to deliver growth."However, the corona crisis also had a major impact on the otherwise very successful u.S. Company’s annual figures. For the full fiscal year just ended, proceeds fell four percent to $37.4 billion. Net profit fell by as much as 37 percent to 2.5 billion dollars.

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