Nike, one of the biggest athletic brand in the world has reported a surprise loss and disappointing sales in the fiscal fourth quarter, a sign that shuttered retail stores across the U.S. and much of the world took an even bigger toll than expected.
Revenue declined 38 percent to $6.31 billion in the period, well short of the $7.38 billion estimated by analysts. Its loss amounted to 51 cents a share, compared with a projection for earnings of 10 cents as reported by Bloomberg.
Nike moved to invest in online platforms to make up for stores being closed but booming e-commerce sales — digital revenue soared 75 percent last quarter, and nearly 80 percent when holding currency-neutral — weren’t enough to make up for the brick-and-mortar slump.
The shares declined as much as 4.6 percent to $96.77 in after-hours trading. They had been up less than 1 percent this year. Nike dragged down the shares of other shoe sellers, including Skechers , Under Armour and Foot Locker.
Meanwhile, Nike’s ongoing deal with Board of Control for Cricket in India (BCCI) is due to end in September 2020 after it was renewed in 2016 for a four-year cycle, according to a BCCI official. The current deal is worth ₹370 crore and it includes ₹85 lakh per match fee and a royalty sum of ₹30 crore to the BCCI. As part of the partnership, the brand has been supplying apparels, footwear and other cricketing gears to Team India free of cost.
Due to financial losses, Nike might quit the same as well.