Nike believes the strategy used in China can help aid a rebound statesideGETTY IMAGES
Nike said that business has "rebounded in China following the outbreak of coronavirus, and the sportswear giant was able to offset much of its lost retail sales with online orders, a strategy executives said they expected to follow in the U.S. and Europe," according to Khadeeja Safdar of the WALL STREET JOURNAL. Nike President & CEO John Donahoe during a Q3 earnings call said, "We are seeing the other side of the crisis in China. We now have a playbook we can use elsewhere." Donahoe cited the strategy in China to "explain how Nike will recover sales in other parts of the world." He said that Nike "closed its stores in China immediately and doubled down on digital sales as consumers were confined to their homes." Safdar notes the pivot "helped Nike accelerate sales through its apps and website." Nike's digital sales "rose 36% across the globe, including a 30% gain in Greater China" in Q3. Nike said that Greater China sales fell 5.2% to $1.51B as a "steep sales decline in February wiped out double-digit growth in the first two months of the quarter." Overall, Nike said that Q3 sales rose 5% from a year ago to $10.1B. Revenue in Nike’s North American market, which "accounts for the majority of total sales," rose 4.4% to $3.98B (WALL STREET JOURNAL, 3/25). At presstime, shares of Nike were trading at $80, up 10.60% (THE DAILY).
JOB WELL DONE: CNBC’s Jim Cramer said Nike had a “rather extraordinary quarter” and it reminded “me of the days before” the coronavirus outbreak. Cramer said Donahoe put on a “clinic” during the company’s earnings call which was “very similar to what” former Nike CEO Mark Parker did. Cramer noted the “numbers are very good in China which is why you will see this stock up” and one of the “things that’s amazing is they very quickly shifted to an online strategy where necessary.” Cramer: “They’ve given you a template of what could happen when you have a worldwide company with a great balance sheet that has tremendous reach and product people want ... (and) there is a path for a lot of international companies" (“Squawk on the Street,” CNBC, 3/25).
DOING THEIR PART: In Portland, Jeff Manning notes Nike execs yesterday revealed that the company is "working with Oregon Health & Science University to develop face shields and perhaps other safety gear that will give health care workers some protection from the highly contagious virus." Donahoe said Nike’s innovation and manufacturing teams are “exploring designs" for personal protective equipment to "support doctors and nurses and others on the front line of this outbreak." He added, "We know that this is a moment in society where the private sector has a major role to play. Companies like Nike need to do our part" (Portland OREGONIAN, 3/25).
